The Life Insurance Code Compliance Committee says the industry needs to step up after breaches rose for the third straight year, growing 9% to 12,314 for the 2022-23 reporting period.

It is particularly concerned about an 18% increase in claims-related breaches to 9149.

“Failing to address claims promptly not only breaches code obligations but also adds unnecessary stress for customers, undermining trust in the industry,” committee Chair Jan McClelland said. “Life insurers must prioritise meeting claims handling and communication time frames to improve customer satisfaction and meet community expectations.”

Last week the committee released its annual code compliance report for the year to last June 30, based on data from 22 insurers that subscribed to the code. It says it now expects claims-related breaches to decline because the updated code, which took effect on July 1 last year, extends the time frame for communicating claims decisions from 10 business days to 15.

“We view this change as disappointing because we consider 10 business days to be sufficient time to communicate a decision. As a result of the extended time frame, we anticipate fewer breaches in future years,” the report said.

“We are monitoring insurers’ compliance with the new time frame closely and will act when we observe non-compliance. We know that many insurers regularly complied with the requirement to communicate the decision within 10 business days and, despite the change in the requirement, we encourage them to continue to do so.”

The report says the claims process is critical for customers, and insurers must get all aspects of it right, from communication and assessment to decision-making and support mechanisms for policyholders.

Click here for the report.