For the first time in its history, the Australian life insurance industry has paid out more than $5 billion in claims in a single year.
According to the latest Claims Paid Statistics report, claims payments were up 13.7% year on year, for the period ending December 2013. Despite one additional insurer participating in the research this year, the figures still well exceeded those reported in 2012.
Total lump sum claims paid increased by 15.6%, and income protection claims by 8.3%. Another notable statistic in the report was the increase in TPD claims paid, which pointed to the value of this type of cover.
The report, which shows the dollars paid, and numbers of claimants paid for each product type, also exposes the top claims causes. It is noted one significant shift from last year being the reshuffle of the incidence of mental illness and cancer claims in the income protection (IP) space. Historically, the number one cause of IP claims is musculoskeletal injuries, followed by cancer at number two, and mental illness rounding out the top three. However, this report shows that in 2013 mental illness surged ahead of cancer, to become the second leading cause of IP claims.