Claims Review Highlights the Cost of Slow Communication

The review, released at the end of October and reported this week, examined claims data from the 2023-24 financial year across six insurers. It focused on cases where insurers had treated delays as being affected by factors outside their control, then looked at whether the insurer-managed parts of the process were handled as well as they could have been.

The finding most relevant for households is straightforward: even where a claim is genuinely complex, the timing and clarity of insurer communication still matters. Insurers in the review acknowledged that information should have been requested earlier in 42 of the 67 TPD claims and 45 of the 116 income protection claims examined. That does not mean every claim would necessarily have been approved sooner, but it does suggest that some waiting time may have been reduced with better process discipline.

This is particularly important because TPD and income protection claims often arise when a person is dealing with illness, injury, reduced income or uncertainty about returning to work. Unlike a simple administration delay, a stalled claim can affect mortgage payments, household budgeting, rehabilitation planning and family stress levels. For consumers trying to understand life insurance claims, the review is a reminder that the claim journey is not only about the final decision; it is also about whether the claimant knows what is needed, what stage the assessment has reached and what timeframes may apply.

The inquiry also sits within a broader period of scrutiny for the life insurance sector. The Life CCC has previously identified claims handling, payment timing, communication and complaints as continuing areas of concern, while the industry is also working through wider Life Insurance Code reform. The practical lesson is not that all delayed claims are avoidable. Medical evidence, employer records, superannuation trustee processes and specialist assessments can all take time. The issue is whether insurers are doing enough early enough to prevent their own processes from becoming another obstacle.

For policyholders and families, useful general steps include:

• keeping policy schedules, superannuation statements and beneficiary details accessible;
• responding to information requests as promptly as circumstances allow;
• asking the insurer or super fund to explain what evidence is still outstanding;
• keeping dated records of calls, emails and documents provided;
• reviewing the type of cover held, including TPD and income protection, before a claim arises.

The review should encourage insurers to tighten internal oversight of longer claims, but it also reinforces a consumer-side reality: understanding policy types, definitions and evidence requirements before a crisis can make later conversations less confusing. That is especially true where households hold multiple forms of cover, such as death, TPD, trauma or income protection insurance, each with different triggers and documentation needs.