An independent expert report by Deloitte on CommInsure’s claims handling practices found no systemic issues relating to declined claims but did find instances of poor customer experiences.
The Deloitte Claims Review Program report set out to identify if there were any systemic issues in how the claims handling processes historically declined life insurance claims and whether the current claims handling processes were drawn in a way that could systemically deliver poor customer outcomes either financially through an incorrect claim decline or through poor customer experience in how a claim is managed.
The report, commissioned last year following media reports on its poor claims handling process, did not find that processes were specifically designed in a way that could systemically result in poor outcomes.
Of the 797 declined claims and 41 claims that were referred to claims administration system, the Colonial Mutual Life Assurance Society (CMLA), the review found eight claims where there was a customer financial impact, and 12 claims where the decision to decline was appropriate but there was a poor customer experience in how it was managed.
The eight customers impacted financially were paid approximately $320,000 in addition to around $400,000 in relation to the claim identified during the planning phase of the claims review.
“We identified a number of priority areas where we consider the execution of elements of the claims handling processes can be enhanced,” the report said.
“We note that until these enhancements are implemented, CMLA is reliant on a strong compliance culture to ensure the risk of poor customer outcomes is minimised.”
The cohort that were subjected to poor customer experience included group total and permanent disability (TPD) claimants (2.7 per cent), retail TPD (5.4 per cent), group death and group terminal illness.
The report found 10 claims where, after CMLA’s reassessment of the claim, the decision to decline was appropriate and the customer was not impacted, while 11 claims remained in the reassessment process.
Helen Troup, Managing Director CommInsure said: “The Deloitte report found no systemic issues with past declined claims. The review was thorough and identified some instances that led to a poor customer experience. We apologise to those customers and as always, when we make a mistake, we make it right”.
The reports made recommendations on how the claims handling process could be improved including upgrading relevant training materials and provide refresher programs to claims staff, and carry out root cause analysis for the identified errors and implement recommendations made in the analysis, and design a data quality framework to ensure correct classification of all claims.
It also recommended designing and implementing a standard claims assessment file structure and format to enable consistent file content, documentation of data, and conclusions.
“This should include a consistent process for identifying the most relevant policy terms applicable to customers,” the report said.
