While the majority of life insurance claims are paid in the first instance (92%), the wait and resolution times vary significantly across providers, a joint study by the regulators found.
AMP (eight months) and Westpac (three months) take the longest to process death claims within group insurance, while TAL and AIA Australia are the most efficient (four weeks each), according to the ASIC and APRA analysis.
As for TPD claims in group insurance, Suncorp/Asteron takes the longest to process claims at 9.7 months, followed by Westpac at 8.5 months and AIA Australia at seven months.
Disability income insurance claims showed AMP takes about 3.2 months to process, followed by AIA Australia at 2.5 months and ANZ OnePath at 2.4 months.
In terms of dispute duration, the regulators found Hannover Re took 17.3 months on average to resolve two death claim disputes. AIA Australia took 5.6 months on average to resolve 14 disputes.
For TPD dispute duration, Hannover Re customers had to wait the longest at nine months for a resolution, followed by ANZ OnePath customers at 8.5 months and AIA Australia at seven months.
In resolving disability income insurance disputes, TAL took the longest at 8.7 months.
The inaugural life insurance claims and dispute statistics used 22,000 data points form 20 insurers.
Generally, individual advised business showed higher admittance rates than individual non-advised for the same cover type, the regulators said.
This could be due to the policyholder having clearer expectations upfront of what is covered by the product, or that the adviser discouraged the policyholder from lodging a claim that is not covered by the policy, they said, adding individual advised accident is an exception and has a low admittance rate.