Fewer customers impacted by breaches, but claims issues remain a focus for life insurers
Life Code Compliance Committee
The Life Insurance Code Compliance Committee (Life CCC) has found fewer breaches reported by insurers, as well as the lowest number of customers affected by breaches since the Life Insurance Code of Practice was first released in 2016.
In its 2024–25 Annual Industry Data and Compliance Report, the Life CCC reports encouraging progress across the industry, with reductions in overall breaches affecting large numbers of customers.
However, the report also found that delays in income protection payments increased over the past year, highlighting ongoing challenges insurers have in meeting important commitments.
Chair of the Life CCC, Jan McClelland AM, said the reduction in customers affected by breaches was encouraging, but sustained improvement depends on insurers addressing the causes of recurring issues.
“It is pleasing to see fewer customers affected by breaches this year, and we hope to see that improvement continue,” Ms McClelland said.
“However, insurers must ensure their systems, controls and oversight are strong enough to prevent repeat issues and support reliable outcomes for customers.”
Breaches related to timely payment of income protection benefits rose significantly, with more customers experiencing delays in receiving payments intended to support them when they are unable to work.
Ms McClelland said timely payments are critical for customers navigating illness or injury.
“Income protection benefits are designed to provide financial stability at a time when customers may be at their most vulnerable,” Ms McClelland said.
“Delayed payments can place additional strain on people who are already dealing with significant personal and financial challenges.”
The report also found that communication processes remain an area requiring focused attention, particularly at the start of claims.
Breaches relating to providing timely initial claims information increased over the reporting period, indicating that some insurers are not consistently meeting expectations for early, clear communication with customers.
“When customers don’t receive timely and clear information at the start of a claim, it can create uncertainty at an already stressful time,” Ms McClelland said.
“Clear communication helps people understand what to expect and supports better outcomes throughout the claims process.”
The Life CCC also highlighted an increase in complaints about Total and Permanent Disability (TPD) claims.
While complaints overall decreased, complaints relating to TPD claims increased and have risen consistently over recent years, reflecting the complexity of these claims and the challenges customers can face when navigating them.
“These claims are often made in difficult and complex circumstances and customers need confidence that insurers’ processes will support timely, consistent and well communicated outcomes,” Ms McClelland said.
“Understanding the drivers of dissatisfaction is an important step in improving both processes and customer experience.”
The Life CCC said the report highlights areas where insurers are making progress, as well as opportunities to strengthen compliance and improve outcomes for customers.
It will continue to work with insurers to support sustained improvements in claims handling, communication and overall Code compliance.
Read the full report: Annual Industry Data and Compliance Report 2024–25
About us:
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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