The Australian Securities and Investments Commission says it will crack down on “harmful” insurance products and claims handling responses this financial year.

Improving consumer outcomes is one of five strategic priorities outlined in the 2024-25 corporate plan, released today. This will include a focus on the design and distribution of financial products, insurance claims handling and dispute resolution.

ASIC says insurer claims and complaints handling after severe weather events is a key issue.

“We will take action against insurers in relation to claims handling, especially in relation to home insurance claims,” the plan says. “We will also take action in response to harmful product design and distribution practices, including conduct that results in consumers receiving unsuitable products ... we will also monitor general insurers’ improvements to claims handling and engage with the independent review of the 2020 General Insurance Code of Practice.”

On weather-related claims, the regulator will “review how general insurers are handling customer complaints and responding to recommendations from previous reviews about their handling of claims following severe weather events”.

The increased focus on claims handling follows criticism of the industry after the 2022 floods and other weather disasters.

The federal government’s inquiry into the 2022 floods heard complaints from policyholders, councils and consumer groups over long delays responding to claims, low cash settlement offers and the use of expert reports to determine claims outcomes.

The industry launched its own review of the floods and accepted in principle the recommendations made by consultant Deloitte, which found the catastrophes exposed weaknesses in insurer systems and processes.

See ASIC’s corporate plan here.

From Insurance News magazine: Loss adjusters are confident the human touch will endure in claims, even as technology takes a greater role