The Financial Services Council (FSC) is considering the viability of an industry-wide database to monitor trends in life insurance claims, such as the surging number of mental health claims.
But industry experts warn insurers may be unwilling to share this information.
Australia's largest life insurer TAL last week backed the establishment a database where companies would provide granular claims and policy information, to better understand risks to the sector, reported The Australian Financial Review. This comes as the number of mental health claims continues to surge and is a major threat to the sustainability of the A$30 billion (US$23.6 billion) sector.
Mr Jesse Krncevic, senior policy manager for life insurance at the FSC, which is the peak body for the life insurance sector, said: "It would be helpful because we would be able to give clarity to consumers about how much we pay out for mental health as a whole. At the moment, we only have individual insurers saying how much they pay out."
"They [individual insurers] know, but there is no centralised place where information is collated."
In the year ended last September, life insurers paid out A$9.4 billion in claims. Some in the industry say up to half of this related to illnesses like anxiety and depression. But life insurer TAL's general manager for health services Sally Phillips told The Australian Financial Review that there is little uniformity in the way life insurers define different health problems.
"I don't think there is an issue around providing [information] ... it's more to ensure we're calling the same thing the same thing," she said.
But getting "relevant and reliable" evidence should not be difficult if there is co-operation from stakeholders, according to Mr Geoff Atkins, the co-author of a report by the Actuaries Institute on mental health and insurance.
"My impression is there are several different initiatives being undertaken, which would be far more effective if different organisations could get together and agree to one solution that everybody uses," he said.
"Life insurers are quite competitive with each other, so they are quite reluctant to share information outside of the company because they feel it's of value to their competitive position."