Dispute lodgement ratios for individual life products have seen a sharp increase since June 2021, the Australian Prudential Regulation Authority (APRA) says.

“This was mainly driven by DII [disability income insurance], given the various repricing activities undertaken to address the product’s sustainability issues,” a twice-yearly report presenting key industry-level claims and dispute outcomes for 17 life insurers says.

Products covered in the report include death, total and permanent disability (TPD), trauma, DII, consumer credit insurance (CCI), funeral and accident.

The dispute lodgement ratio refers to the number of claims-related disputes lodged during the period per 100,000 lives insured.

“In general, more complex products are likely to have higher dispute lodgement ratios. TPD, Trauma and DII in particular show relatively high ratios,” APRA says. “While DII shows higher ratios than TPD and Trauma, it also has a higher claims frequency.”

The report covers a rolling 12-month period from January 1 to December 31 and also provides data to update the Australian Securities and Investments Commission MoneySmart life insurance claims comparison tool. Distribution channels included are group ordinary, group super, individual advised and individual non-advised.

APRA says original decision-reversed rates across all cover types have been trending downwards since December 2021 and are the lowest levels in four years.

A “dispute” can refer to a matter managed within an insurer internal dispute resolution system, one registered with an external dispute resolution scheme or tribunal, or legal proceedings initiated by the claimant against the insurer regarding a claim.

A total of 15,444 disputes were resolved during the reporting period. TPD and DII make up the vast majority of disputes, representing 27% and 56% of the total respectively. Three products in particular have a small number of disputes resolved: CCI (199 disputes), funeral (665 disputes) and Accident (218 disputes).

The next data release will be on October 17. The latest report is available here.