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Claims delays: AMP answers consumer groupís broadside

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AMP Life is defending its claims-handling for group insurance after Choice subsidiary Super Consumers Australia labelled delays “abhorrent” in an open letter.

Recent Australian Prudential Regulation Authority (APRA) statistics show AMP takes an average of six months to process death claims, and 12.4% of them take more than a year. The average wait in the industry is two weeks, Super Consumers says.

“Given AMP’s abhorrent insurance claims-handling delays, we have serious doubts whether they are acting in the best interests of their members,” Super Consumers Director Xavier O’Halloran said in a statement.

But an AMP spokeswoman told insuranceNEWS.com.au the company previously captured data differently to the industry, which partly accounts for the difference in the statistics.

It includes the time taken to identify or confirm beneficiaries for death claims and the time after being notified, rather than after receiving initial claims forms, and holding aged claims open while waiting for a customer response.

AMP is planning an upgrade of its claims management technology platform next year to increase automation across death and total and permanent disability claims, the spokeswoman said.

“This will reduce the complexity of processing claims and improve the experience for our customers,” she told insuranceNEWS.com.au.

“These initiatives and the alignment of data capture will take time to show in the reported data. However, we expect AMP Life statistics to improve and reflect accordingly as initiatives are implemented and completed over the next twelve months.”

AMP has a 92.6% claims acceptance rate and paid out $1.21 billion in claims last year.

Mr O’Halloran says there is currently very little scrutiny on whether superfunds are providing appropriate insurance services to their members.

Super Consumers is also expressing concern over claims processing delays in cases where AMP is both the super trustee and insurance provider.

“It’s not good enough that families who are dealing with the tragedy of losing a loved one and paying funeral costs are being left at the mercy of this tardy insurer,” Mr O’Halloran adds.

Choice recently named AMP Superannuation in its Shonky Awards for “ruined retirements” for its long claims-handling delays and so-called “zombie” accounts.