What’s driving claims costs?
What’s driving claims costs? | Insurance Business Australia
Insurance News
What’s driving claims costs?
APRA shares key findings
Insurance News
By
Roxanne Libatique
The Australian Prudential Regulation Authority (APRA) has released its report on the insurance claims and policies data that it collects in its annual National Claims and Policies Database (NCPD), identifying key claims trends driving costs.
While the claims costs of finalised claims have been stable since 2014, incurred costs have increased over the last few years, mainly in 2016 and 2018 accident years, according to the report.
The main industries driving the cost increases were:
construction;
agriculture;
accommodation cafes and restaurants;
retail trade;
wholesale trade; and
mining.
Meanwhile, the industries with a higher level of work injury claims were:
construction;
communication services;
mining;
manufacturing; and
transport storage.
“These industries typically use more labour hire and contracting arrangements than other industries. Worker injury claims in recent years have an average size which is more than double that for other bodily injury claims,” the report said.
Property damage claims
The report showed that the key causes of loss driving the cost increase were faulty products or workmanship, impact, other financial or non-financial loss, and environmental or substance.
The main industries driving the cost increases were:
construction;
finance and insurance;
retail trade;
wholesale trade; and
agriculture.
The report, published in collaboration with Finity Consulting, supports one of the goals of APRA’s Corporate Plan 2021-2025, specifically finding solutions to current challenges in the financial services industry by providing insights on the affordability of public and product liability, professional indemnity, and directors and officers insurance.
set out the major drivers of claim costs, explore recent increases in claim costs, and discuss the key drivers of these increases;
analyse insurance classes’ performance to identify whether there is a strong relationship between claims experience and pricing; and
provide more detailed data to assist industry participants to benchmark their portfolios to industry experience.
Last month, APRA released its latest life insurance claims and disputes statistics covering industry and insurer-level data.
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!
