Disability income insurance (DII) policies have the highest claims paid ratio for last year in two out of the four channels where the products are sold, according to the latest update from the Australia Prudential Regulation Authority (APRA).

Individual DII products bought through advisers reported a claims paid ratio of 70%, and for non-advised covers the ratio was 106%.

Group super and group ordinary are the two channels where DII did not dictate, coming in second with ratios of 82% and 91% respectively. Total and permanent disability (TPD) had the highest ratio of 85% in group super and trauma in group ordinary with 112%.

APRA says the DII ratios “aligns with the material losses” that have been reported by the industry since 2014 for individual products. Individual DII products have lost $3.4 billion over the past five years.

The regulator has already imposed an upfront capital requirement on individual DII providers since March 31 and warned more measures will be taken if they fail to improve the pricing and sustainability of the market.

The APRA update is based on industry level claims and dispute outcomes for 20 life insurers writing direct business last year.

The admittance rate across all cover types and sales channel was 94%. Individual advised death cover had an admittance rate of 97% and non-advised policies 89%.

For TPD, individual advised cover had an 81% admittance rate and 67% for products not bought through an adviser.

For more from the report, click here.