QBE and Hollard have acknowledged their systems for flagging vulnerable customers were under pressure after the disastrous 2022 floods, but told a parliamentary inquiry today that improvements are being implemented. 

The House of Representatives Standing Committee on Economics heard QBE Australia and Pacific CEO Sue Houghton admit the insurer did not have the ability to flag vulnerable policyholders on its claims system and was able to note vulnerability only during its complaints process.   

However, Ms Houghton rejected accusations from independent MP Andrew Gee that QBE was “not great” at identifying vulnerable customers, arguing it had a “good record” and is making crucial system improvements.  

“I look at the work that we do [with] our vulnerable customers, with a number of cases where we go out of our way to help people who are experiencing vulnerability,” she told the 2022 floods inquiry. 

“We train [staff] to recognise, respond and refer as part of their onboarding process where we get them to listen to [vulnerability] triggers. I look at a team that spends a lot of time looking at it. 

“What I will acknowledge is that we do not get everything right all the time. When we don’t get it right, we look to train and coach people.”  

Ms Houghton told the committee QBE’s communication sometimes did not “hit the mark” but it is working with organisations such as the Red Cross to help staff accommodate the increased needs of vulnerable customers. 

QBE says the industry’s stress testing suffered a notable “gap” and had not been tested against compounding factors such as covid and market volatility.   

Hollard CEO Paul Fahey admitted the company faced significant challenges following its acquisition of CommInsure, which significantly increased its exposure to severe weather events.

“We grew too much in some areas where we had a portfolio that wasn’t balanced, which played out in [the NSW and southeast Queensland floods] loss,” he said. “Our loss from [those floods] from our market share was significantly oversized and we don’t expect to see this number again.” 

Mr Gee questioned Hollard’s response, saying Mr Fahey provided a “corporate one-line apology” in his statement and the company’s submission was “devoid of any real acknowledgement of pain and heartache caused to customers”. 

Mr Fahey said he had publicly apologised to thousands of affected customers and his response focused on informing customers “what we are doing about it”. 

“Over the course of the past 18 months, you would be hard-pressed to find another insurer with such a transformation road map,” Mr Fahey said. “Every part of our business has been turned upside down, whether it be technology, people, process.”  

Mr Gee targeted Hollard’s handling of a claim in Eugowra, NSW, where a couple’s request for a second report was denied by an insurer-appointed engineer, despite the claim later being accepted by the insurer. Mr Fahey apologised for its handling and said the example was a “learning opportunity for staff to question findings”. 

Mr Fahey said it was time to “rethink home insurance”, noting that “it can’t be everything to everyone, so there might be a need for bespoke products”. 

The Australian Financial Complaints Authority told the committee a “significant shift is needed for insurers to meet community expectations”. 

COO Justin Untersteiner said the authority saw a 50% rise in complaints against general insurers in the 2022-23 financial year, primarily driven by delays and denials, with nearly 30,000 cases lodged. 

“The high volumes of complaints we saw coming through in 2023 concerned us deeply,” he said. “It was a signal that things were not working for large numbers of customers as they interacted with their insurers. 

“We want insurers to look at the complaints their customers are making, and to seek to understand what is really driving these disputes. We believe they should ask themselves hard questions about whether or how their products, sales practices and claims handling practices need to change.” 

The inquiry will continue on Friday with the General Insurance Code Governance Committee appearing at 9.15am, and Munich Re from 11am.