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Super funds made headlines over the past few months due to systemic administration issues particularly related to death and total permanent disability (TPD) claims.
Rainmaker Information analysed APRA data on life insurance claims and disputes, claims handling rates and claims settlement durations for death and TPD.
There are a total of eight group insurers serving the superannuation industry.
The group insurance market is highly concentrated with just three insurers holding a total market share of 88%.
TAL is the largest death &TPD insurer with 45% market share, AIA is second with 23%, followed by MetLife with 19%.
There were 9 million death policies and 8 million TPD policies issued via group insurance in super as at June 2024.
43,000 claims were filed for death & TPD in the 12 months to June 2024 through group insurance in superannuation.
This was split across death (13,000) and TPD claims (30,000).
Of the total claims, 69% were accepted by the insurers, while only 6% of claims were declined.
20% of claims remain undetermined, which converts to 6,600 claims.
The average time it takes an insurer to finalise a death claim is estimated to be a month, but this drastically increases to 4.7 months for TPD claims settlements.
The average range for TPD claims went from a minimum of three months to a maximum of six months.
Death claims processing times point to an efficient process being in place, with 76% of death claims processed in just under two weeks.
An estimated 17% of death claims took between two weeks to two months, 5% took between two to six months, while 1% took more than six months to process.
When it comes to processing TPD claims, insurers are taking considerably longer.
14% of TPD claims are processed within two weeks, 23% of TPD claims took between two weeks and two months, while 40% were processed in between two to six months and the remaining 23% of TPD claims took more than six months to process.
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Total risk market inflows were down a marginal 0.6% over the year to June 2024, decreasing from $18.3 billion to $18.2 billion.
Dual access ETPs, which are transacted both on stock exchanges and off-market through funds managers, can cost four times as much as the rest of the Australian ETP market.
