Some 1596 life insurance disputes were lodged with the Australian Financial Complaints Authority (AFCA) last year, down 35% from 2022, a recent member forum heard.

“This is a really positive and pleasing outcome for this sector, particularly in an environment where we’re seeing elevated complaint levels across other product areas,” Lead Ombudsman Insurance Emma Curtis said.

“So, well done to life insurers for reducing their complaint volumes to AFCA. I think this indicates that what you’re doing in your customer-focused work and your internal dispute resolution is working really well and customers don’t necessarily need to come to AFCA to have their complaint resolved.”

Last year, it took 104 days on average to resolve a life insurance complaint, down 11 days from 2022, and 39% of disputes were resolved at the registration and referral stage, up 4 percentage points.

“This is our early stage of complaint resolution ... so this is also a positive step,” Ms Curtis said.

Claims delays caused the most complaints, followed by incorrect premiums, denial of claims, cancellation of policies and service quality.

“Delay in claim handling ... has consistently been the biggest issue in this area for many years,” Ms Curtis said. “This indicates that there are clear opportunities for reviewing your claims handling processes, particularly claim time frames and customer communication about the claims process.

“We do appreciate that [total and permanent disability] and [income protection] claims, particularly for self-employed people, can be complex, but we do continue to see insurers requesting information from their claimants in a disjointed way.”

She says insurers should try to better understand insureds’ circumstances early and make quick, relevant and targeted requests for information.

“We do see many complaints ... where insureds have come to us with a claim where the insurer has made requests for information over a protracted period where some of the information ends up being irrelevant or it could and should have been requested earlier,” Ms Curtis said. “So we do encourage insurers to keep working on these issues to try to remove frictions and reduce stress for complainants and claimants who are likely experiencing a challenging life event when they make a claim.”