The independent review of the General Insurance Code of Practice, which outlines service standards for insurers, has concluded with the release of its final report.
The process, which began in November 2023, sought to ensure that the code continues to meet the needs of Australian consumers and aligns with regulatory and industry expectations.
The review panel, led by former APRA deputy chair Helen Rowell and including Gerard Brody and Paul Muir, made 101 recommendations in its initial report released in September 2024.
The final report retained all the recommendations, focusing on improving protections for vulnerable customers, addressing financial hardship, and refining claims handling practices.
The panel also considered the findings of the 2022 Flood Inquiry, which evaluated insurer responses to claims following significant flooding events.
According to Rowell, the alignment between the flood inquiry’s findings and the code review’s recommendations underscores the importance of raising standards across the insurance industry.
“The alignment between the recommendations in the flood inquiry report and the panel’s final report highlights the need to strengthen minimum standards of industry practice across all aspects of insurer and consumer engagement,” she said.
Rowell urged the Insurance Council of Australia (ICA) to implement the recommendations promptly, with an updated code to be submitted to the Australian Securities and Investments Commission (ASIC) for approval.
The review process involved substantial industry input, including feedback from 33 organisations and individuals.
The panel thanked all stakeholders for their participation and called for insurers to act ahead of the revised code’s formal adoption to address key areas of concern.
“We look forward to seeing the recommendations come to life, and the improvement in the experience and outcomes for consumers as a result,” Rowell said.
The ICA has expressed support for most of the proposed changes and pledged to continue working with stakeholders to implement improvements.
The industry has agreed to, or is actively exploring, 78 recommendations that aim to enhance consumer outcomes, streamline claims processes, and address systemic issues. The ICA highlighted its progress on initiatives such as the development of standardised contract clauses and improved support mechanisms for vulnerable customers.
ICA CEO Andrew Hall said the council appreciates the insights provided by the review panel and consumer advocates, which will help shape the industry’s approach to better serving customers.
“The Insurance Council and its members appreciate the insights consumer advocates bring to making sure insurance works better for customers. We look forward to continuing our work with consumer advocates in the new year to address the remaining key issues and recommendations,” he said.
He added that the recommendations are a significant step towards addressing the challenges faced by insurers and their customers, particularly during extreme weather events.
The ICA stated that further updates on the industry’s efforts to implement the recommendations will be included in the next iteration of a Deloitte report commissioned to assess progress.
The report, initially expected in 2024, has been deferred to early 2025 due to the concurrent work on code review and flood inquiry recommendations.
Consumer advocacy organisations have welcomed the insurance industry’s initial response to the code review and flood inquiry but urged insurers to address the remaining recommendations.
Groups such as the Financial Rights Legal Centre, Consumer Action Law Centre, and Financial Counselling Australia pointed out that many critical issues remain unresolved.
Alexandra Kelly, acting CEO of the Financial Rights Legal Centre, described the industry’s progress as partial.
“Insurers have picked off some low hanging fruit in the recommendations, and we commend them for beginning their journey to implement some changes. However, there remain 60 code recommendations and 49 flood report recommendations outstanding – or close to 60% of the total recommendations needing to be considered and worked on. And most of these are the real meat of the recommendations that need addressing,” she said.
Stephanie Tonkin of the Consumer Action Law Centre added that public confidence in the insurance sector depends on full implementation of the recommendations.
“We are hopeful that much of the harmful conduct we have been calling out will be left to the past – but there is still a long way to go. There remain a number of important recommendations that the ICA is yet to commit to,” she said.
Consumer groups also highlighted concerns about affordability and access to insurance, particularly as premiums rise.
Vicki Staff, from Financial Counselling Australia, called for insurers to provide more robust support for customers in financial distress.
“It’s great to see the insurers taking meaningful steps to improve outcomes for their customers, but the outstanding issues are glaringly obvious, and today’s response has ignored critical areas that impact people experiencing vulnerability,” she said.
“The industry needs to commit to suitable support for customers facing financial hardship. With insurance premiums more expensive than ever, this really is a no brainer.”
The ICA has reiterated its commitment to continued engagement with stakeholders and regulators, with further progress expected in 2025.
“The insurance industry is committed to enhancing and uplifting outcomes for customers – not just during a disaster, but systemically,” Hall said.
