General insurers in Australia have introduced a new standard aimed at improving the use of independent expert reports in the insurance claims process.
Expert reports, which are typically generated after on-site inspections, play a crucial role in determining the cause of damage and recommending necessary repairs.
The Expert Report Best Practice Standard, developed by the Insurance Council of Australia (ICA), seeks to bring greater consistency to how insurers engage experts such as engineers, builders, and hydrologists when assessing claims.
The initiative was launched in response to concerns voiced by consumer groups and policyholders, as well as findings from ongoing reviews, including the parliamentary inquiry and the independent review of the General Insurance Code of Practice.
The new standard outlines the expectations for creating and using these reports, focusing on key principles such as clear communication, factual accuracy, timely delivery, and impartiality. It also highlights the importance of customer engagement and provides guidelines for addressing customer vulnerabilities, ensuring that the qualifications of experts are transparent.
To help consumers understand these changes, the ICA has released a fact sheet that explains the new standards.
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ICA CEO Andrew Hall emphasised that the development of the standard was driven by feedback from customers who often found the expert report process confusing and felt disadvantaged.
“Not all insurance claims are straightforward – sometimes, insurers require expert advice to help them determine the cause of damage or the extent of repairs,” he said. “But we know that customers have too often found this process to be unclear and as non-experts, feel like they are at a disadvantage.”
He added that the ICA would recommend that this standard be integrated into the next version of the General Insurance Code of Practice.
In November 2023, the ICA announced the formation of a panel to review the 2020 General Insurance Code of Practice.
The panel, required to conduct reviews every three years, includes Helen Rowell, a former deputy chair of the Australian Prudential Regulation Authority (APRA), consumer advocate Gerard Brody, and insurance expert Paul Muir.
The review will occur in two phases, in line with recommendations from the Federal Parliamentary Inquiry into the insurance industry’s response to the 2022 floods. The first phase, focusing on broader issues such as support for vulnerable customers and the interaction between the code and existing laws, was expected to produce findings by June 2024. The second phase, concentrating on flood-related topics, will deliver its findings by June 2025.
The panel will also address recommendations from Deloitte’s review of the insurance industry’s handling of the 2022 floods, particularly concerning the definition of Extraordinary Catastrophes in the General Insurance Code of Practice.
In July 2024, the Independent Review Panel confirmed that it had begun assessing feedback from the initial consultation on the General Insurance Code of Practice.
The consultation paper, which explored issues identified in the review’s terms of reference, received 22 public submissions.
The ICA’s submission to the review suggested several updates to the code, including enhancements to provisions for financial hardship, expanded definitions of vulnerability, and improved processes for identifying individuals at risk of financial abuse, especially after severe weather events.
