IAN NAREV, CEO COMMONWEALTH BANK, STATEMENT ON LIFE INSURANCE

Life insurance is there to support customers and their families at times of great need and distress. Insurance providers have a responsibility to deal with claims as sensitively, as quickly and as fairly as possible.

It is clear that in relation to the customers who have been the subject of recent media enquiries, we failed to meet that responsibility.

I am saddened and disappointed by the handling of these cases. I will personally write to the customers concerned to apologise and offer to meet with them face to face.

In these cases we focused too much on process rather than people. By their nature, life insurance policies can be complex. Claims processes involve the review and assessment of detailed documentation.  Whilst thoroughness is important for the integrity of the system, this must be balanced by customer need and dignity.

Here, we got that balance wrong. We focused on details which caused delays at critical times for customers that needed help.

In 2015, CommInsure paid more than $850 million of life and income protection payments to 22,000 people and their families. It is a substantial business, and that scale supports customers for the long term which is essential in life insurance. However in complex or difficult cases, claims assessment can sometimes be bureaucratic and not escalated quickly enough.

As part of our relentless focus on values at Commonwealth Bank, people are encouraged to escalate concerns or difficult decisions. Here it appears that did not happen. These customers felt frustrated and let down by CommInsure, and believed they were more likely to have their voices heard by speaking to people outside Commonwealth Bank. Having had these cases brought to the attention of senior management within the last few days, we have acted on unresolved matters.

Among more than four million CommInsure customers there may be other cases similar to these. However, the evidence shows that in the vast majority of cases the right outcomes for customers are reached in the right way.

Last year, the Financial Ombudsman Service reported that the likelihood of a dispute involving CommInsure was two per 100,000 policies. Regardless, wherever we have let customers down it is our responsibility to do the right thing.

We are deeply committed to being an ethical business. We will do our utmost to maintain the highest standards and avoid mistakes. But as we have said before, being ethical does not mean being perfect. So an important part of being ethical is responding the right way to mistakes. If we do make a mistake, we will apologise and put it right.

If any of our customers have questions about their CommInsure policies, please contact us directly on 1800 106 133 (8:00am-8:00pm Monday-Friday, AEDST; 8:00am-8:00pm Saturday and 8:00am-4:00pm Sunday, AEDST) or 13 10 56 (8:00am-8:00pm Monday-Friday, AEDST).  Options are available in cases where customers are unhappy with their outcome. Free and independent external dispute resolution can be accessed through the Financial Ombudsman Service on 1800 367 287 or the Superannuation Complaints Tribunal on 1300 884 114.

ENDS

Information on CommInsure’s Trauma cover for heart attack claims

CommInsure’s Trauma heart attack definition pays for severe heart attacks and considers a range of medical factors when assessing a claim. Medical advances and improvements in detection technology mean our current definitions need to be updated. This update was planned for later this year and has now been accelerated to be completed as soon as possible.