Earlier information requests and clearer communication key to better claims handling
Life Code Compliance Committee
The Life Code Compliance Committee is calling on life insurers to request information earlier and strengthen communication with customers to reduce avoidable delays and better support people waiting for claim decisions.
Its latest inquiry report, Clearer communication, timelier decisions: Improving claims handling in life insurance, identifies gaps in how insurers managed longer claims and highlights improvements some have already begun making in response.
Chair of the Life Code Compliance Committee, Jan McClelland AM, said the inquiry provided practical lessons for insurers across the industry.
“Some claims take longer for legitimate reasons outside an insurer’s control. What insurers can do is ensure their own processes keep claims moving and give customers clear information and support while they wait,” Ms McClelland said.
“For someone dealing with illness, injury or loss of income, avoiding unnecessary delays and understanding what happens next can make an important difference.”
The inquiry examined longer-running total and permanent disability (TPD) and income protection claims across six insurers, drawing on claims data for the 2023–24 financial year. It focused on claims where insurers had determined that circumstances beyond their control affected decision timeframes.
Insurers reported that they should have requested information earlier in 42 of the 67 TPD claims and 45 of the 116 income protection claims reviewed.
“Identifying the information needed early, coordinating requests and giving claims managers access to technical support can help insurers avoid adding to delays,” Ms McClelland said.
“If a late request has delayed a decision or payment, insurers should review whether the customer was disadvantaged and whether the insurer needs to provide remediation.”
Some insurers have already responded by providing remediation, reporting breaches and strengthening their claims-handling processes. Changes include earlier and more targeted information requests, greater technical support for claims managers, improved correspondence templates and closer monitoring of longer claims.
“We welcome the action these insurers have taken through the inquiry. The focus now should be on building on that momentum and embedding lasting improvements across the industry to deliver better outcomes for customers in everyday claims handling,” Ms McClelland said.
The Life Code Compliance Committee will monitor whether the changes translate into better claims handling in practice and expect all life insurers to use the findings to review their own processes.
Read Clearer communication, timelier decisions: Improving claims handling in life insurance
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The Life CCC is an independent body established to monitor compliance with the Life Insurance Code of Practice. Its purpose is to ensure consistent and high-quality service standards are maintained for the benefit of consumers. This also works towards increasing trust and confidence in the life insurance industry.
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