IAG says it is improving the way it manages demand for temporary accommodation after major events, particularly when customers require long-term support, and that enhanced digital capability has improved its oversight of claim status and prioritisation. 

MD and CEO Nick Hawkins told the federal parliamentary inquiry into insurer responses to 2022’s major floods that lessons had been learned from the disaster and adjustments made.

He said the changes allow IAG to better identify vulnerable customers and assist those with more complex needs.  

IAG also supports the introduction of stronger mitigation solutions such as changed building codes, land planning and relocation from extreme risk areas. 

“We’ve said we can do better ... across our country and we haven’t turned up saying that we’ve got this right,” Mr Hawkins told the inquiry committee. 

“We would say to any of our customers who haven’t had the experience with us that they should, or if we've let them down, then obviously that’s not good enough from our point of view, and we’re going to be better. Where we’ve got it wrong – and we know there are examples of that – we want to make good on those particulars, but, as importantly, make sure we actually change the way we run our company.” 

Mr Hawkins was accompanied at the hearing by NRMA Insurance CEO Jenny Batch and IAG Direct Claims EGM Luke Gallagher. 

Independent MP Andrew Gee said IAG’s dispute resolution numbers are unacceptable and its inquiry statements “platitudinous”. 

“Your success rates are appalling,” he said. “You really need to think about what you do. I have to say that out of all of the insurance companies that I dealt with, out of the storm and flood events of November 2022, if I had to pick one that I got the most complaints about, it was [IAG brand] NRMA.” 

NRMA Insurance representatives took too long to arrive in flood-hit towns such as Eugowra, he said. “The roads were open the next day ... it was the talk of the town that you were not there ... it took you 10 days to get in.” 

The flood claim experience across the insurance industry is evidence “a system like this is broken”, Mr Gee said. 

Mr Hawkins said IAG will “learn and do better”.  

“There are definitely examples where the way that we have managed a claim wasn’t as good as we should have and so I would definitely say sorry to those customers. That was not our intention. We know that we’ve made some mistakes, they’ve been highlighted to us and we’re not walking past that,” he said. 

Asked why there is no standard flood definition, Mr Hawkins said IAG backs greater collaboration across the industry where it makes sense to “ensure that we standardise any confusion in the coverage of an insurance policy”.  

“That doesn’t mean every insurance policy should be the same,” he said. “It should be, when an insurance policy talks about something or excludes something in particular, that the words used for that are common across the industry,” he said.  

“We’re supportive of more common wording across the industry, not necessarily standard terms and conditions, because I think having different forms of insurance that are appropriate for different customers, or communities or businesses, is reasonable. But within the contracts, the standard words is really a good thing for our country.” 

Youi CEO Nathaniel Simpson, who also appeared at the hearing, said standardised definitions can be a double-edged sword.  

“It’s important that the understanding is clear and that everybody understands that the same way, but really the success of that will be hard to apply in practice,” he said. 

Mr Hawkins said while there has been progress on building properties out of harm's way, town planners are still contemplating developing in high-risk areas. 

Australia is “definitely” seeing increased frequency and severity of weather events, he said. “We’ve got investment mitigation actions being taken, and they’re all in the right direction, but unfortunately, the scale of what we expect to occur versus the investment – there is still a gap. That risk is going up, not down. So we need to do more as a country to deal with that.”