Home / Life Insurance / Income protection, disability dominate industry claims payments
3 August 2020
Life insurers paid out $12.06 billion last year from 101,821 claims, with income protection (IP) and disability income accounting for the biggest portion at $4.34 billion, the Financial Services Council (FSC) says.
Lump sum payments for death or terminal illness placed second at $3.64 billion, followed by total and permanent disability (TPD) at $2.58 billion and trauma and critical illness at $1.06 billion.
The FSC released the figures, which were compiled by KPMG, at its annual life insurance summit last week.
Of the $4.34 billion in IP and disability income claims payments made, accident dominated at 33% ($1.45 billion).
Cancer and mental disorders each accounted for 14%, or $595.1 million and $594.4 million respectively, followed by musculoskeletal system on 13% ($554.1 million) and circulatory system 9% ($370.7 million).
For death or terminal illness lump sum payments, cancer led with 43% of claims paid, or $1.58 billion. Accident placed second on 17% ($630.9 million), followed by circulatory system 14% ($507.2 million), abnormal clinical findings 10% ($379.6 million) and nervous system 3% ($121.6 million).
For TPD claims, mental disorders was the leading cause at 25% ($649.2 million), followed by musculoskeletal on 22% ($575.4 million), accident 15% ($374.2 million), nervous system 12% ($311.5 million) and cancer 9% ($240.3 million).
Within trauma and critical illness payments, cancer made up over half of claims paid at $609.2 million, trailed by circulatory system 24% ($249.2 million), nervous system 5% ($58.1 million), accident 3% ($30.3 million) and abnormal clinical findings 2% ($17.2 million).