Term Life Insurance Fuels Customer Grievances

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According to the data, income protection and funeral plans trailed, accounting for 22% and 11% of customer dissatisfaction, respectively. A staggering total of 54,896 life insurance-related grievances were logged during the 2023-24 financial period, leading to over $11 million in compensatory actions being taken to address these issues.

A notable feature of the report is the efficiency with which these complaints were handled. Half of all life insurance grievances were settled within the same day they were reported, and 75% saw closure within just eight days. These statistics reflect the urgent nature with which life insurers are addressing customer concerns.

The primary concerns raised by consumers were categorized into service-related issues (29%), delays (13%), and premium disputes (10%). The emphasis on service issues underscores the importance for insurers to enhance customer interaction and mitigate operational delays.

Starting from October 5, 2021, financial services are mandated to document all grievances filed through their dispute resolution mechanisms. This data collection became a formal requirement at the outset of the current year, aimed at providing transparency and accountability within the financial sector.

According to ASIC, "As the first step in the financial dispute resolution framework, internal dispute resolution plays a vital role in providing remedies and protections for consumers. It is an avenue for redress to millions of Australians who complain to financial firms each year."

This report finds its origin from the comprehensive study at ASIC and serves as a stepping stone towards understanding how internal processes can be optimized for public benefit.

Published:Friday, 13th Dec 2024
Source: Paige Estritori

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