Rob Stock, writing for Stuff.co.nz tells that Partners Life has announced that it will be releasing a publication that reveals insight into many aspects of the business in the coming weeks. Chairman Jim Minto has said that information about complaints, unsuccessful claims, IP premium increases, and withdrawn products will be included in the publication.
“Life insurer Partners Life will begin publishing information about the $2.7 billion-a-year industry which is usually kept from the eyes of the public, and is challenging other insurers to do the same.
In about four weeks, Partners Life’s chairman Jim Minto said the company would begin publishing information including the number and types of complaints the company received from customers, and the proportion of claims not paid.
It will reveal 9 per cent of its claims made were not paid.
Other uncomfortable information it would reveal include the 12 per cent increase in premiums on its trauma and income protection policies, which had seen spikes in claims, and the 314 complaints it had from among its 201,000 policyholders.
It has withdrawn its funeral cover, a type of insurance the FMA and Reserve Bank criticised as poor value, and will reveal details of changes in its underwriting on policies to limit the risk presented by the Covid-19 pandemic when accepting new policyholders.”
Naomi Ballantyne said that the evidence Partners submitted to the FMA and RBNZ should also be shared with customers. Naomi suggested that the publication of such information would encourage competition to offer fair treatment and create a record of insurer promises, minimising backtracking.
“Naomi Ballantyne, Partners Life managing director, said in 2019 the FMA and Reserve Bank told insurers to provide evidence that they were not ripping off customers.
Insurers had to comply, leading to the September 2019 report in which no insurers were named and shamed.
Ballantyne said: “Having done that huge piece of work, and having the regulator know all of the things we do, we said, ‘Well, that’s great to tell the regulator, but no-one else knows’.”
“All that information we provide to them, we felt we should provide to our customers,” she said.
If all life insurers published the information it would encourage competition around good behaviour towards policyholders, but also create a public record of promises from insurers to policyholders, making it hard for companies to backtrack on them.” Click here to read more
This is a valuable initiative. Of course, much of this information is hardly confidential - but the level of detail in the disclosure is new. I know that the industry, working through the Financial Services Council, is keen to develop more data sharing. Meanwhile, pro-active disclosures of this type are valuable, adding to the transparency in the market and allowing journalists and consumers to understand what happens at insurers.
Common claims payment reporting is a difficult area - defining what counts as a potential claim is critical to establishing an accurate and comparable number. For example: given Partners Life's high levels of income protection and trauma coverage a claim decline rate of 9% does not sound particularly bad, given the usual disagreements, misunderstandings, and that fraud is real. An insurer that issues only life insurance could probably report a much lower number - because death is harder to fake than, say, attempting to stretch out an IP claim because the jobs market is tough right now. An encouraging thought is that having a good conversation about what claims get paid, and what should not, gives confidence to consumers in what they are buying and its sustainability.
In other news:
Suncorp: Customers only cutting insurance as an “absolute last resort”