The general insurance industry continues to struggle meeting claims handling timeframes according to the latest report from the General Insurance Code Governance Committee (CGC).
The Annual Data and Compliance Report, published today, highlights more than 45,000 claims-handling breaches of the industry Code of Practice in the 2022-23 reporting period, an increase of 16%.
Chair of the CGC, Ms Veronique Ingram, recognised the significance of a greater volume of claims during the year while expressing concern at the findings.
"We know that insurers were dealing with greater volumes of claims but claims handling timeframes are crucial for customer wellbeing. It is troubling that we saw such significant numbers of breaches in this reporting period,” Ms Ingram said.
“The issues appear to stem from insufficient resourcing, training, and technology investment by insurers, and they must do more to address these.
“Ultimately, addressing these underlying issues will lead to better outcomes for customers.”
The report found that a small cohort of insurers were responsible for most of the breaches, while other insurers successfully reduced breaches related to claims handling timeframes.
“We welcome the positive steps, and we know that some insurers have worked hard on reducing breaches in this area following reports in recent years from Deloitte, ASIC and the CGC,” Ms Ingram said.
“We encourage all insurers to continue reviewing and enhancing claims handling procedures and customer communications.”
The Annual Data and Compliance Report also noted a 61% increase in reported complaints, the fourth consecutive year of increases.
“The increase this year can be attributed in part to an expanded definition of complaint, but we have seen these numbers go up for several years now, which is a worry,” Ms Ingram said.
"It is a consequence of the increase in claims-handling breaches. As we see the breaches go up, we see more complaints come in.
“Insurers should be analysing their complaints data to pinpoint areas for improvement, particularly regarding claims handling and communication delays."
The report also urged insurers to adequately resource their complaints handling functions and invest in technology to streamline and improve processes.
Ms Ingram reiterated the CGC’s commitment to engaging with insurers on areas of concern but warned that where significant non-compliance persists, appropriate action, including sanctions, will be taken.
“We have seen encouraging signs of progress in the latest reporting period, and we expect insurers to consolidate these gains in the coming year,” Ms Ingram said.
About us:
The Code Governance Committee is an independent body that monitors and enforces compliance with the industry Code of Practice.
The Code covers many aspects of a consumer’s relationship with their insurer, from buying insurance and making a claim to working through financial hardship and options for lodging a complaint.
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