The Australian Financial Complaints Authority (AFCA), has said its “top issue” across the entire financial services sector in 2022-23 was delays in insurance claim handling.
AFCA reported last week that complaints about claims delays were up more than 75% - most of them not to do with flood or fire claims. Across the sector, general insurance complaints rose by 50% to almost 28,000.
The claims process is often a subject of industry discussion. Despite general insurers’ public declarations about improving claims processes, the AFCA report suggests that some insurance companies are still failing to meet consumer expectations.
Only one insurer provided specific responses.
“Allianz has taken active steps to address these challenges,” said Nicholas Scofield (pictured above), the insurer’s chief corporate affairs officer. “We have significantly bolstered the permanent size of our claims team, also adopting a more holistic portfolio management with dedicated staff handling a claim from beginning to end, thus, providing continuity in a customer’s engagement with us.”
Scofield said Allianz has also bolstered its specialist large and complex loss team which aims to provide greater oversight and “more timely resolution of complex claims.”
Allianz, he said, has also put in place increased oversight and performance management of its third party suppliers, particularly loss adjusters. Scofield expects this help to address issues in a timely manner and “ensure that customers receive the appropriate level of service.”
“We anticipate that these measures will have a positive impact in reducing delays in insurance claims handling with an accompanying reduction in complaints,” said Scofield.
Like the statement from the Insurance Council of Australia (ICA), Scofield also noted “the unprecedented level of natural catastrophe events, including the largest insurance catastrophe on record experienced in early 2022, resulted in a significant increase in the volume of claims.”
He said, “regrettably,” COVID induced disruptions and shortages of materials “led to delays in communication and claims decisions for some customers.”
Scofield said, “unfortunately”, large catastrophes will always put pressure on resources and service standards.
“Allianz appreciates the understanding of our customers in such circumstances as they can be assured that we will always endeavour to provide the best customer experience we can,” he said.
The regulator’s report last week did not identify insurance firms by name. However, AFCA’s Datacube database does. The regulator describes this resource as “an open and accessible visual comparative report about financial complaints in Australia.”
Datacube details complaints for financial firms that have received four or more complaints from consumers and is current up until December 2022.
For the second half of 2022, the Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) led the financial services industry with the most complaints received. However, AAI Limited, a division of Suncorp Group, is in position three with more than 2,600 complaints. Insurance Australia Limited, part of Insurance Australia Group (IAG), is in sixth place, with more than 1,700 complaints.
A couple of places down the board comes Allianz (1,500+ complaints) and further down again, QBE (750+ complaints).
While two banks top the leader board for most complaints, home insurance products generated more complaints than any other financial services offering: about 3,700.
AFCA’s complaints report last week wasn’t bad news for the entire insurance industry. The life insurance sector received a positive report card: its complaints number dropped by nearly 25% to just under 1,900.
“Pleasingly, according to AFCA’s complaints data, consumer complaints in relation to life insurers have dropped 24% compared with FY22,” said a company spokeswoman for the Council of Australian Life Insurers (CALI) in a statement. “This decrease coincides with the substantial investment the life insurance industry has made in improving internal processes and practices ahead of the commencement of the Life Insurance Code of Practice (Life Code) on July 1, 2023.”
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