New data gives insight into claims

A new report released by the FSC in conjunction with KPMG – compiled from the analysis of more than 30,000 claims from 10 insurers between 2007 and 2011 – has been used to update the Disability Income Table, upon which insurers base premium costs.

Life insurers were costing their premiums using data from two decades ago, but now they have a more up-to-date view of what claims clients are making.

“Using old data impacted their ability to fully comprehend the real drivers of claims,” KPMG actuarial partner Briallen Cummings said.

“This new report includes data and analytics insights that were unimaginable 20 year ago, which life companies will benefit hugely from."

Commenting on the updated data, FSC chief executive Sally Loane said it will give life companies a “deeper understanding” of the key issues and “provide richer evidence for writing policies”.

“The new table will also help consumers to make informed decisions about their insurance needs: for example, women over 45 are nearly twice as likely to be disabled from sickness as men,” Ms Loane said.

The new data shows 45-year-old females are 94 per cent more likely to make a claim because of sickness than male counterparts, but 22 per cent less likely to make a claim due to an accident than their male white-collar counterparts.

It also found that, compared to the overall level of recovery from sickness claims, a person with cancer is 20 per cent less likely to return to work in the first 12 months, but is 70 per cent more likely to return to work in the third and subsequent years.