Consumer groups have called on the general insurance sector to stop with the excuses and invest some of their huge profits into proper claims and complaints handling following the release of an ASIC report into abysmal internal dispute resolution practices.

Quotes attributable to:

Alexandra Kelly, Director of Casework, Financial Rights Legal Centre

“Australians are fed up with being ground down by insurers by poor claims handling and terrible complaints processes.”

“For years now, insurers have been failing Australians when they make a claim, forcing consumers to make complaints to under-resourced internal dispute resolution departments. They then find themselves frustrated with poor responses which in turn forces consumers to take their complaint to the external dispute resolution service. For someone who has gone through a flood or other significant financial loss, it is nothing short of retraumatising.”

“In reality, general insurers are just outsourcing their claims and complaints handling to the Australian Financial Complaints Authority – a fact reflected in the huge numbers of complaints that they have seen.”

“The fact that 1 in 6 complaints are not being identified by insurers demonstrates either a head-in-the-sand approach to customer service or systemic ignorance of customer needs and a misunderstanding of the consumer experience.”

“Report after report this year has highlighted how far general insurers are lagging in meeting community, regulator and government expectations. The recent parliamentary inquiry report insurers response to the 2022 floods, the independent review into the general insurance Code, their own Deloittes report into their response and now this damning report into complaints handling are all telling the same story: insurers are really bad at this and need to massive overhaul.”

“How many more reports are needed for insurers to begin making the investments and changes they need to make to the services and products they provide fit for purpose? The time for action from the insurance sector is now”

Background

The ASIC Report REP 802 Cause for complaint: Complaints handling in general insurance and Media Release can be found here: 24-268MR ASIC puts insurers on notice for blind spots in complaints handling | ASIC

Contact

For further information contact media@financialrights.org.au