Paying Life Insurance Claims - Confidence still high
In the wake of the findings from the Banking Royal Commission, we wanted to find out what the impact would be, if any, on peoples’ attitudes to Life Insurance.
Our research, conducted in December 2018, showed that consumer confidence in life insurers paying claims has remained stable in spite of the findings of the Banking Royal Commission.
The findings revealed that out of the respondents who have Life or Income Protection cover, 60.8% are either “reasonably confident”, “confident” or “very confident” that their claim payment would be made, with 10.9% “ Not confident at all”.
NobleOak has been tracking consumer sentiment for the past three years and it is heartening to see that people’s confidence that life insurers will pay their claim has remained consistently strong following a very turbulent year.
It is even more encouraging, given the issues and concerns about claims handling raised by Commissioner Kenneth Hayne following the insurance hearings at the Banking Royal Commission last year.
The survey further showed that whilst 41% of people said the findings of the Royal Commission would not have any impact on their actions, 14% said they would not take out Life Insurance or would not renew their cover as result of the findings from the Royal Commission.
In addition, we found that there are high levels of public confidence that the Life Insurance industry issues identified by the Royal Commission will be addressed and rectified after the report is delivered to the Federal Government in February 2019.
A total of 72.3%, or more than seven in ten, survey respondents said they had some level of confidence that the Royal Commission would lead to improvements and positive change. However, 27.8% were not confident the issues would be fixed.
At NobleOak we believe that trust is the foundation that Life Insurance is built on. Without it, people would not take out cover. The fact that so many respondents believe that the Royal Commission will lead to positive change is very encouraging.
In 2016 $9 Billion was paid out in Life Insurance claims ($6 billion in 2015), with more than $26 million being paid daily.
Life insurance is a social responsibility, and operates in an ethical framework that is meant to benefit individuals, the wider society and businesses. Paying claims is what all Life Insurers do. The industry still has some work to do to achieve 100% consumer confidence but there should be no doubt that the necessary changes to re-build trust are underway.
The research referred to in this Whitepaper was conducted independently by PureProfile in December 2018 from a survey completed by over 1,000 Australians.