Australian Financial Complaints Authority CEO and chief ombudsman David Locke says many insurers are yet to make significant progress addressing claims handling delays, and a lack of action in the sector is “disappointing”.

He told a members’ forum today the authority wants businesses to “get on top of” delays and it has been engaging with the Insurance Council of Australia and individual companies to address a high volume of complaints.

“Some insurers have made progress, but for many, we have yet to see significant progress towards sustained improvements,” he said.

“Over the past two years, consumers have faced a record level of premium growth in both car and home insurance. Despite this, we remain disappointed with the lack of action regarding appropriate resourcing, product design and the adoption of a resolution mindset.”

AFCA received 104,861 complaints across all the sectors it covers last financial year, including 29,335 concerning general insurance.

COO Justin Untersteiner said the total is too high and has about doubled compared with levels under predecessor schemes.

“If you think about why we exist, we’re there to help to bring resolution to really sticky and complex disputes where they can’t be resolved between the parties,” he said. “What we shouldn’t be dealing with is the everyday stuff.”

Mr Untersteiner said claims handling has remained a driver of “very, very high” general insurance complaints and is an example of where issues could be resolved before reaching the ombudsman. 

“I don’t see that AFCA is the place to add a great deal of value in dealing with the dispute around a claim handling delay, and often when they are resolved, it’s through an apology or a small amount of non-financial loss compensation that could have been dealt with at the firm level,” he said.

“We think there is a great opportunity for firms to ... resolve things earlier and not come to AFCA.” 

Mr Untersteiner said it is important consumers feel comfortable going through internal dispute resolution processes and that the avenue is not bypassed. AFCA has made some systems changes to alert consumers to the company-level pathway, he said.

The members’ forum also heard that AFCA is continuing to improve its technology following a major overhaul, and is pursuing efficiencies. 

Mr Locke said he wants financial businesses use AFCA’s data and insights to drive improvements and changes in their practices.

The next six-monthly update to the AFCA Datacube, which provides comparison information, will be available early next month and will include complaints received from January 1 to June 30, he said.

“We are working on enhancing the Datacube to support even better performance comparison and help you visualise complaint trends,” he told the online forum.

From Insurance News magazine: Our tech seminar pitch winner on her mission to eradicate 
"ancient ways" in the field of compliance