TPD claim settlements take 'considerably longer': Rainmaker

New group insurance research finds that total permanent disability (TPD) claims are taking much longer to process, while death claims appear to have more efficient processes in place.

According to Rainmaker's latest benchmarking data, a total of 43,000 claims were filed for death and TPD in the 12 months to June 2024 among group insurers.

This was split across death claims (13,000) and TPD claims (30,000), with 69% of the total claims accepted by the insurers.

The majority (76%) of death claims processed in just under two weeks and about 17% were settled between two weeks to two months during the period.

However, when it comes to TPD claims settlement, insurers are taking considerably longer.

Merely 14% are processed within two weeks, with 23% taking more than six months to complete, in comparison to 1% in death claims for the same period.

About 23% of TPD claims took two weeks to two months, while some 40% were processed in between two to six months.

The findings come as super funds make headlines for their systemic failures over death and TPD claims, including ASIC taking legal proceedings against AustralianSuper over the delayed processing of some 7000 death benefit claims in March.

Super Consumers Australia has also highlighted that a substantial number of Australians are unaware or do not understand the coverage of the default insurance in super.

Further, Rainmaker found that the group insurance market is highly concentrated with just three insurers holding a total market share of 88%.

TAL is the largest death and TPD insurer with a 45% market share. AIA is second with 23%, followed by MetLife with 19%.

There are a total of eight insurers serving the superannuation industry, including ART Life, Hannover Re, MLC, Resolution Life and Zurich.