Insurers reported 67,394 code breaches last financial year, down 13% on the previous period, and significant breaches also dropped, to 115 from 123.

The General Insurance Code Governance Committee’s 2023-24 data and compliance report also shows “notable reductions” around key interactions between insurers and consumers, such as claims and complaints.

“These improvements suggest that insurers are implementing stronger preventative measures and are increasingly focused on identifying and addressing compliance gaps,” chair Veronique Ingram says.

“However, claims handling remains the most breached area under the code, and sustained efforts will be required to drive further improvement.”

The committee says there were rises in breaches of “obligations that require a more qualitative assessment”, such as providing tailored support to vulnerable customers or ensuring honesty, fairness and transparency.

But even this is potentially good news.

“While these increases may appear concerning at first glance, they may reflect enhanced monitoring and a more nuanced understanding of obligations,” Ms Ingram says.

“Insurers are uncovering issues that might have gone unnoticed in the past and are taking steps to address them, signalling a positive shift in compliance culture.”

Despite these advancements, the committee says a “persistent issue remains” – the failure to adequately investigate and address the root causes of breaches.

“The most common cause of breaches reported was ‘processes and procedures not followed’, a pattern that has persisted for years,” Ms Ingram says.

“This points to deeper systemic issues, such as outdated workflows, underinvestment in technology and insufficient resourcing in critical areas such as complaints handling.

“Addressing these challenges requires insurers to go beyond remedial training. They must critically examine whether their processes are fit for purpose, easy to follow, and aligned with the needs of both customers and staff.”

Complaint numbers have risen too – up 18% to 1.4 million, with motor insurance and premium rises particular areas of concern.

“Customers want to understand why premiums have increased and expect insurers to provide transparent, detailed explanations that avoid jargon and outline the factors that influence the costs,” the report says.

“Effective communication can address customer concerns and can help an insurer to build trust that reduces dissatisfaction and prevents escalation into formal complaints.”

Obligations for which breaches have fallen or risen significantly are highlighted below.

Notable decreases in breaches

“We will tell you about the progress of your claim at least every 20 business days.” Down to 10,989 from 28,189.

“If we appoint an investigator or employee to investigate your claim, then within five business days we will tell you that we have appointed them and what their role is. When we appoint an investigator or employee to investigate your claim, then the investigation process will comply with the claims investigation standards.” Down to 119 from 1749.

“Your complaint will be handled by a person with appropriate authority, knowledge or experience. This will not be the person whose decision or conduct is what your complaint is about.” Down to 96 from 516.

“We will keep you informed about the progress of your complaint at least every 10 business days, unless it is resolved earlier or you agree to a different time frame.” Down to 4296 from 6453.

“We will make a decision about your complaint within 30 calendar days. If we cannot make our decision within this time frame, then before this deadline passes we will tell you, in writing, the reasons for the delay and about your right to take your complaint to the Australian Financial Complaints Authority, and its contact details.” Down to 2795 from 4224.

Notable increases in breaches

“We will respond to your routine enquiries about your claim’s progress within 10 business days.” Up to 7060 from 3253.

“Our decision will be made within four months of receiving your claim, unless paragraph 78 applies. If we do not make a decision within that time, we will tell you in writing about our complaints process.” Up to 1790 from 709.  

“We will respond to catastrophes efficiently, professionally, practically and compassionately.” Up to 439 from 12.

“If you tell us, or we identify, that due to a vulnerability you need additional support or assistance, we will work with you and try to find a suitable, sensitive and compassionate way for us to proceed. We will do this as early as practicable and we will protect your right to privacy.” Up to 1550 from 641.

“We comply with the principles of the Privacy Act 1988 and/or any relevant state or territory requirements when we collect, store, use, disclose and destroy personal information about you.” Up to 7349 from 5706.

Click here to read the full report.