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Please explain: AMP claims handling delays

Super Consumers Australia publishes an Open Letter to the board of AMP Limited.

Super Consumers Australia is today publishing an Open Letter to the board of AMP Limited, asking what the company is doing to improve group insurance claims handling times.

The most recent update to APRA Life Insurance Claims and Disputes data for the year to June 2019 shows that AMP continues to fall well behind its industry peers in group insurance claims handling times.

Every other insurer processes most of its death claims in 2 weeks. AMP takes on average almost 6 months, with one in eight (12.4 per cent) claims leaving families in limbo for more than a year.

"It's not good enough that families who are dealing with the tragedy of losing a loved one and paying funeral costs are being left at the mercy of this tardy insurer," says Director of Super Consumers Australia, Xavier O'Halloran.

Super Consumers Australia has particular concern about claims processing delays where AMP is both the superannuation trustee, and the insurance provider.

The findings come as APRA launches a consultation to enact the Hayne Royal Commission recommendation to reduce conflicts of interest in insurance in superannuation, by requiring funds who are using a related party insurer provide 'independent certification' they are acting in the best interests of members.

"APRA's intervention here is timely - given AMP's abhorrent insurance claims handling delays, we have serious doubts whether they are acting in the best interests of their members." 

"We welcome AMP's explanation for these delays as there is currently very little scrutiny on whether super funds are providing appropriate insurance services to their members," says Mr. O'Halloran.

Media contact:
Xavier O'Halloran

Director, Super Consumers Australia

0415 823 607

xohalloran@choice.com.au

Background

In June APRA published data for the preceding year to December 2018, and we noted the long delays faced by AMP customers in an article published on the Choice website.

In October CHOICE and Super Consumers Australia awarded AMP superannuation a Shonky for its large number of duplicate accounts and claims handling delays.

Data source:

APRA biannual Claims and Disputes Statistics, updated 18 November, Refer to tab named "Claims Duration_GrpSup":

https://www.apra.gov.au/life-insurance-claims-and-disputes-statistics

Death Claims

The average claim is finalised in 1.2 months, with 76% of all claims are finalised within 2 weeks. Only 21% of AMP claims have been finalised within two weeks. AMP took an average of 5.7 months to finalise death claims, the slowest by a wide margin.

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Total and Permanent Disability Claims

AMP is also the slowest in assessing Total and Permanent Disability (TPD) claims. The average across the industry is 5 months, but AMP is taking an average of 8.3 months, with almost one in five (19.3 per cent) of claims unresolved after 12 months.

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Open Letter to AMP Limited Board

David Murray, Chair

AMP Limited

33 Alfred St

Sydney NSW 2000

Dear Mr Murray,

GROUP INSURANCE CLAIM DELAYS 

I am writing regarding the staggering delays in processing superannuation group insurance claims evident in the most recent Life Insurance Claims and Disputes data for FY19.

The data shows that AMP is taking significantly longer than all competitors to assess group insurance death claims, and much longer than most to process TPD claims.

Across the industry, 76.3 per cent of all death claims are processed within two weeks, but only 21.1 per cent of AMP claims have been completed in this timeframe. 

Compared with the industry average of just over a month (1.2 months), AMP took an average of 5.7 months to finalise death claims, the slowest by a wide margin.

Almost one in eight (12.4 per cent) death claims with AMP were left in limbo for more than a year, compared with an industry average closer to 1 per cent. 

AMP is processing significantly fewer claims - 607 over the period - than its competitors, who are assessing thousands of cases much faster.

AMP is also the slowest in assessing Total and Permanent Disability (TPD) claims. The average across the industry is 5 months, but AMP is taking an average of 8.3 months, with almost one in five (19.3 per cent) of claims unresolved after 12 months.

Could you please advise what AMP is doing to improve group insurance claims handling times?

Kind regards,

H:\Xavier\real signature.jpg

Xavier O'Halloran

Director, Super Consumers Australia