A review of life insurers’ compliance with the industry code of practice has found improvements and areas requiring further attention. 

The Life Code Compliance Committee says an increase in the number of breaches in 2023-24 “is a positive sign” because it shows insurers have improved processes to identify issues.

Reported code breaches rose 19% to 14,670 in the period, according to the annual industry data and compliance report released today.

“Our previous report highlighted potential under-reporting across the industry, so this increase is a positive sign,” code committee chair Jan McClelland said. “It means insurers are improving identification and reporting of significant breaches and are now better positioned to understand and address issues effectively. Ultimately, this leads to improving compliance with the code.”

In another positive trend, the number of complaints reported by insurers fell 20% to 60,303.

Ms McClelland says the drop is “an encouraging sign that insurers’ ongoing efforts to enhance customer experience and service quality are having an impact”. 

Areas still requiring improvement include claims handling, staff training, communications and support for vulnerable customers, the report says. 

While some insurers have cut claims handling time frames, delays persist, particularly in total and permanent disability and income protection products. 

“Addressing delays in claims processing must remain a priority,” Ms McClelland said.

“Customers rely on these payments for financial security, and insurers must ensure claims are assessed and finalised in a timely manner.”

Code subscribers should also work to cut the number of human errors causing breaches, the code committee says.

Human error accounted for 44% (6489) of breaches in 2023-24, up from 36% (4484) in 2022-23. 

“We understand there will always be a level of human error,” the report says. “However, the current rate of human error must, and it is reasonable to expect that it should, come down.”

See the report, drawing on data from the 22 code subscribers, here.