APRA data confirms value added by advisers

New data released by the Australian Prudential Regulation Authority (APRA) has confirmed that people who use an adviser for their insurance needs are significantly more likely to have them approved by the insurer.

The APRA Life Insurance Claims and Disputes Statistics covering the year to December, 2018, found that, “generally, Individual Advised business shows higher admittance rates than Individual Non-Advised for the same cover type”.

“This could be due to the policy-holder having clearer expectations up front of what is covered by the product, or (related to the previous point) the adviser discouraging the policyholder from lodging a claim that is not covered by the policy,” the APRA analysis said.

The APRA data revealed that the admittance rate across all cover types and distribution channels was 93 per cent, with the highest level of admittance applying to trauma cover (100 per cent) followed by death cover (99 per cent) and disability cover (96 per cent).

This compared to total and permanent disability cover (TPD) where the admittance rate was just 68 per cent.

The APRA analysis said the relatively lower admittance rate in respect of cover types such as TPD, trauma and accident reflected the complexities of assessing the claims, as well as consumer clarity on what exactly is covered by the policy.

It said that, by comparison, death and funeral claims were relatively straightforward to assess, which was reflected in the admittance rates.

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