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APRA data points to value of group insurance
The latest Australian Prudential Regulation Authority (APRA) Life Insurance Claims and Dispute statistics have reinforced the value of group insurance.
The data reveals that members of group insurance schemes within superannuation funds are well served with 98% claims admittance rates with respect to death cover and 91% with respect to total and permanent disability (TPD) insurance.
As well, the data covering the 12 months to the end of December last year, show that disability income insurance (DII) claims admittance stood at 96%.
The APRA data and analysis pointed to the continuing issues surrounding DII insurance.
It noted that, across all distribution channels except group ordinary, “DII business has the highest claims paid ratio, implying that the all-in costs of the products exceed premiums paid”.
“This aligns with the material losses reported by the Australian life insurance industry from 2014 onwards for the individual DII product, and the observations made in APRA’s thematic review into the sustainability of this product,” it said.
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