The General Insurance Code Governance Committee (CGC) wants to be able to name insurers that breach standards.

The current charter prevents it from naming subscribers in its annual data reports. 

The CGC says a pending independent review of the code by the Insurance Council of Australia (ICA) is an opportunity to allow it to name insurers in its reporting on breaches in order to strengthen compliance with the General Insurance Code of Practice.

“We can only name an insurer that has breached the Code if we impose a naming sanction. As part of a review process, we will recommend that we be allowed to name insurers in our reporting on breaches,” the CGC says.

The Australian Banking Association has accepted a similar recommendation for banks to be named in breach reporting, and the Banking Code Compliance Committee will implement that approach when a new Banking Code comes into effect.

In a submission to insurers’ responses to flood events across Queensland, NSW, Victoria and Tasmania last year, the CGC says naming insurers is a “vital element of enhancing compliance with the Code of Practice”. 

“It provides transparency which helps customers make informed decisions and increases accountability which creates additional motivation for insurers to address issues with compliance,” the submission said.

In its own claim handling submission, the ICA says that across the four events being examined by the inquiry, there were more than 303,000 claims lodged totalling almost $7.4 billion. The floods came on top of six declared events in 2021.

The CGC says it has identified “a range of areas” in which insurers could have performed better, more effectively alleviating customer stress and delivering better outcomes. It has several remediation audits and investigations in progress, and is considering further action, including sanctions where appropriate. 

The CGC has begun an inquiry into insurer oversight of external experts and says relying solely on the performance of individual claims assessors is “not in line with contemporary practice”. Insurers must maintain adequate staffing levels to be able to effectively manage surges in volume from extreme weather events, it says, and this includes effective training for new staff.

“Insurers still have much work to do improving communications with customers. It is important that they remind customers of policy coverage and exclusions, including the benefits and limits of the policy.

“When managing a claim, insurers must explain the loss assessment process clearly and be proactive in sharing information with consumers to help manage their expectations,” the CGC submission says.

Insurers must know precisely what information its third-party contractor tells a customer about a claim, CGC says, adding that “many of the issues related to communication can be alleviated with more staff and better training”. 

Insurers should also invest in technology and automation more widely, for example staff reminders for contacting a customer, automating simple administration tasks, and portals that allow customers to track the status of claims.

“Insurers must do more to prepare for what is becoming a regular occurrence. They must invest in the staff, systems and processes required to adequately deal with surges in demand,” the CGC said. "Such surges need to be factored into regular business planning so that insurers are capable of responding and delivering better outcomes for customers.”

Insurers should also consider adopting geospatial mapping and macro-level data to identify customers who may be affected by certain extreme weather events and are likely to make claims as best practice.

"We encourage its widespread uptake. Furthermore, insurers can proactively provide education to customers in the lead-up to seasons with higher chances of extreme weather events, such as floods and bushfires,” the CGC said.

See the submissions here.