Releasing claims data not straightforward: Insurers

New Zealand insurers offering life and health insurance would need to change a number of processes before they could start publishing data on the number of claims they accept.

Friday, October 28th 2016, 2:00PM

by Susan Edmunds

Naomi Ballantyne

The Insurance Council of New Zealand is believed to be collecting that data for the general insurance sector at present, to show how many claims are accepted compared to those declined.

And in Australia, watchdog ASIC wants individual claims denial rates to be released, to provide more information to consumers.

It recently produced a report on claims handling in the industry, which it said was designed to determine whether there were any systemic concerns.

But the idea of ongoing release of claims information from individual insurers has sparked concerns that it could lead to a “leaderboard” concept among insurers, who would avoid rejecting claims in order to get a higher placing, with fewer rejections compared to competitors.

It is something that the New Zealand personal insurance industry has considered before.

Former Financial Services Council chief executive Peter Neilson said he had tried but failed to persuade members to collect claim decline rates for a regular survey.

Insurance commentator Michael Naylor said: "Insurers need to release a lot more data. It’s about building an active on-going trust relationship with clients."

Partners Life managing director Naomi Ballantyne said she had pushed for a number of years to get the FSC to become a provider of consolidated industry data, for media and government agencies. That should cover claims, types of benefits, averages ages and lives assured, she said.

“Nearly everyone agreed this data would be valuable but most couldn’t/wouldn’t commit to the systems development required to enable them to provide their data to the FSC.”

At AIA, Naomi Cameron said she supported transparency but had concerns about the idea.

“In order not to cause damage to the industry and mislead consumers, however, it also needs to be accurate. We would need to address the inconsistency in the way claims statistics are created, which is a problem we have seen in other markets looking at doing this,” she said.

“Product differences also need to be properly segmented and considered so we would be comparing apples with apples. This is important to ensure consumers receive accurate information, and we protect the integrity and perception of our industry.”

Fidelity Life chief financial officer Ed Eadie said he would back the idea of releasing claims data, in theory.

"Provided the FSC could work out a fair and meaningful way to compare what are quite disparate books of business across the industry. In the interests of transparency, Fidelity Life regularly publishes a claims ratio, which is a key measure of the amount of claims we pay out annually versus our premium income for the year."

Tags: health insurance Insurance Advisers Life insurance