Life Insurance Claims Statistics – All the facts and figures
Which are the best life insurance companies for paying claims?
The number one question we get asked at Insurance Watch is “Do life insurance companies really pay claims?”.
In order to answer this question we have gathered together, all in one place, life insurance claims statistics and information from a variety of sources.
Life insurance companies issue policies for Death/Terminal Illness, TPD, Trauma and Income Protection insurance, so the statistics below are broken up into these different insurance types.
What percentage of life insurance claims are paid overall?
We know from studies done by ASIC and APRA that, for the life insurance industry as a whole, more than 90% of all claims are being paid. The overall percentage of claims paid was between 92% and 94% in the years 2016 to 2021.
The percentage of claims paid varies depending on the type of insurance. The percentage of Life insurance and Income Protection claims paid is typically higher than for TPD and Trauma claims.
Claims acceptance rates can also vary depending on the distribution channel. An ASIC report in 2018 highlighted that direct life insurance had lower claims payout ratios than fully underwritten policies taken out through advisers/brokers. The latest claims acceptance data for 2023 continues to show lower claims acceptance rates for policies sold directly to the public.
A 2016 report by ASIC into claims handling in the life insurance industry (summarised in the infographic below) examined some of the reasons why claims decisions have been disputed in the past and the areas they would be focussing on with insurers to deliver better outcomes in the future.
A later ASIC review of the way insurers handle income protection claims released in 2022 found that there was still room for improvement.
Life Insurance Industry Claims & Disputes – last 6 years
APRA/ASIC have been collecting detailed claims data over the last 6 years – 2018 to 2023.
Over this time claims acceptance rates for Life, Trauma and Income Protection policies have been relatively steady.
Unfortunately, TPD claims acceptance rates, after showing improvement in 2022, have deteriorated again in 2023.
The graph below is based on the ASIC/APRA claims data for policies distributed by advisers/brokers (such as Insurance Watch).
Unfortunately, over the last 6 years there has been an increase in claims disputes in all product categories.
The higher rate of disputes for different product types such as income protection is partly related to the volume of claims.
However APRA has noted a sharp increase in income protection claims dispute rates from 2021 that appears to be related to the repricing activities of insurers to address product sustainability issues. In 2023 this trend continued.
How have individual life insurance companies performed in paying claims?
In March 2019 ASIC and APRA released for the first time statistics on the payout rates of individual insurers.
The most recent data released on 16th April 2024 covers claims for the 12 month period ending 31 December 2023. Data for claims in 2024 will be available in April 2025.
For each life insurance company these statistics show:
- Average claims accepted rate, i.e. the percentage of claims an insurer accepted for payment out of all claims that were decided, and
- Average claim time in months that it took for an insurer to decide whether or not to accept a claim.
We present graphically below the 2023 claims statistics for each life insurance company for policies issued through financial advisers/brokers for different insurance types e.g. Life, TPD, Trauma and Income Protection. Where no result is shown for an individual insurer this is because APRA have reported that the number of claims was too small to provide a reliable result. Claims statistics for other sales channels can be viewed on MoneySmart.
To see how the claims acceptance rates for individual insurers have changed over the last 6 years go to Compare Life Insurance Companies.
To compare the policy benefits and premiums offered by these insurers use Compare Quotes Online.
Life Insurance Claims Statistics 2023
For life insurance claims, the industry average acceptance rate in 2023 was 97.4%.
In 2023 Resolution Life/AMP had the highest Life insurance claims acceptance rate of 99.1% and Zurich the lowest claims acceptance rate of 96.5%.
The average time for a life insurance claim to be accepted was 1.5 months in 2023.
MLC/Encompass were the fastest for paying life insurance claims in 2023 at 1 month on average, with the slowest being Zurich/OnePath at 2.4 months.
TPD Insurance Claims Statistics 2023
For TPD insurance claims the industry average acceptance rate in 2023 was 83%.
In 2023 Resolution Life/AMP had the highest TPD claims acceptance rate of 90.4% and ClearView had the lowest claims acceptance rate of 59.6%.
The average time for a TPD insurance claim to be accepted was 7.3 months in 2023.
The fastest insurer for paying TPD claims in 2023 was TAL/Asteron at 6.6 months on average, with the slowest being ClearView at 11.4 months.
Trauma Insurance Claims Statistics 2023
For Trauma insurance claims, the industry average acceptance rate in 2023 was 86.1%.
In 2023 NobleOak/NEOS had the highest trauma claims acceptance rate of 96.7% and Zurich had the lowest claims acceptance rate of 81.7%.
The average time for a Trauma insurance claim to be accepted in 2023 was 1.4 months.
NobleOak/NEOS paid trauma claims the fastest on average in 2023 at 0.9 of a month with the slowest being Resolution Life/AMP at 2.4 months.
Income Protection Claims Statistics 2023
For Income Protection insurance claims, the industry average acceptance rate in 2023 was 95.2%.
In 2023 NobleOak/NEOS had the highest income protection claims acceptance rate of 97.4% and TAL/Asteron had the lowest claims acceptance rate of 93.7%.
The average time for an Income Protection insurance claim to be accepted was 1.5 months in 2023.
TAL/Asteron were the fastest payer of income protection claims on average in 2023 at 1.2 months with the slowest being Clearview at 2.1 months.
Under the FSC Life Insurance Code of Practice, insurers should make their initial decision within 2 months of a claim for income protection and within 6 months for other cover types.
Find out how to compare income protection policies from these insurance companies.
Which life insurers have the most claims disputes?
In 2021/22 the Australian Financial Complaints Authority (AFCA) handled 72,358 disputes related to financial services. Of these, 3% were related to life insurance including TPD, Trauma and income protection insurance. The biggest source of disputes was in the area of credit which accounted for 37% of the total, followed by general insurance (i.e. car, house etc) at 26% and deposit taking (banking) at 15%.
ASIC and APRA have also released claims dispute statistics for individual companies for the year ending 31 December 2023. These statistics include disputes lodged with an insurer, an external dispute resolution scheme like AFCA, or a Court or Tribunal. The reasons for these disputes include dissatisfaction with claims decisions, amount received or the claims process.
The absolute number of disputes need to be viewed relative to the number of lives insured by that insurer. Therefore the data from ASIC below shows for each insurer the number of disputes for every 100,000 people insured (data shown below is for policies taken out through financial advisers/brokers only).
On this adjusted basis in 2023 Resolution Life/AMP had the highest number of claims disputes for all types of insurance including Life, TPD, Trauma and Income Protection policies.
What is the claims experience of other industry players?
Over time Insurance Watch has helped many of its customers to make successful claims on their policies. In other parts of the website we provide examples of these Life Insurance, Trauma and Income Protection claims. In our experience very few claims are declined, although non disclosure can put clients at risk. As every claim is different in its circumstances, it is difficult to generalize these results across insurers.
A recent survey of advisers tried to obtain an industry wide perspective of the relative claims performance of insurance companies. The survey results ranked insurers according to adviser perceptions of how the companies managed claims. However as the claims experience of each adviser may be limited, the results are likely to be subjective rather than based on factual data.
What is the experience of customers who have submitted claims?
Customer reviews have been left on our website by over 1,500 Life, TPD, Trauma and Income Protection policyholders. From these we can learn about the claims experiences of individuals – both good and bad. But again we can’t know the full circumstances behind each claim (e.g. were these superannuation or retail policies, was non-disclosure involved etc) or how indicative these particular claims are of an insurer’s overall performance.
What we do know is that good news stories often don’t often receive much publicity. So we have collected claims videos from various insurers telling the moving stories of clients who have needed to make a claim and how this has made a difference to their lives and the lives of their families.
You can watch videos of their real life stories below:
Life Insurance and TPD Claims Stories
Trauma / Critical Illness Claims Stories
Income Protection Claims Stories
What do the detailed life insurance claims statistics show?
The overall claims statistics show that claims do get paid and in very large numbers. The Financial Services Council released aggregate figures across the whole Australian life insurance market showing that in 2019 over 100,000 claims were paid amounting to over $12 Billion. This should give confidence to buyers of insurance policies that help will be there when they need it the most.
Below we have included the detailed claims statistics from 2022 provided by the three largest life insurance companies in Australia – TAL, AIA and Zurich (including OnePath). These provide a breakdown of claims paid.
The absolute dollar value of claims paid must be viewed in the context of the size of each insurer and their premiums in force. In some cases the insurer has only provided claim statistics for the retail sector of the market, which does not include claims from group/super or direct policies.
Equally the mix of claims for each insurer will be influenced by the composition of their customers. For example, each insurer has a different mix of Life/TPD/Trauma/Income Protection insurance policies, group/super versus individual/retail policies, policyholder ages and occupations.
Compare the premiums and benefits offered by these companies at Compare Quotes Online
Other useful information:
- Find out how to make a claim by watching the video “Understanding the Claims Process“
- Compare quotes and benefits for the policies offered by the above insurance companies at Compare Quotes Online Now
- Find out who owns the above insurance companies, their size and their background at Compare Insurance Companies
- Obtain advice on your personal situation from one of our qualified advisers, including insurance strategies and policies to suit your needs, by going to Get Advice