The Australian Securities and Investments Commission has told insurers it is time to resolve remaining claims from the 2022 floods catastrophe, with the regulator concerned about the numbers still outstanding.

ASIC commissioner Alan Kirkland says the regulator acknowledges that almost 99% of claims from the Queensland and northern NSW flooding have been closed.

“That’s no small feat, but at the same time, the near 1% still outstanding equates to more than 1800 claims,” he told the Insurance Council of Australia annual conference in Brisbane yesterday.

“Each unresolved claim represents an individual or family who can’t move on with their lives. We feel that it is time to give them closure.”  

ASIC released a claims handling report in August last year that highlighted insurer staffing shortfalls and the high level of issue resolution at the earliest stage of the Australian Financial Complaints Authority process. 

“We’ve been gathering data on resourcing in the period since, which shows that increases in internal dispute resolution resourcing have not matched the rate of increases in complaints – and, quite frankly, too many complaints are still making their way through to AFCA,” Mr Kirkland said.

Compared with some other parts of the financial services sector, insurance “has still got a way to go” in its maturity of thinking about internal dispute resolution and how to use it effectively to deal with issues as early as possible, he said.

Mr Kirkland said insurers have added temporary claims handling staff, but a “sustained effort to improve resourcing” is needed. He urged businesses to use data such as missed payments or frequent address changes to identify vulnerability, and to ensure appropriate responses and improved communications.  

During a regulators session at the conference, Mr Kirkland also said work on standardisation is important, and evidence to the parliamentary floods inquiry showed many people do not understand policy clauses such as obligations related to wear and tear and maintenance.

“I think there needs to be a concerted effort to try and bridge that gap,” he said. “I don’t think we can completely close it because insurance is a complex product.”

Mr Kirkland also suggested “a bit of pragmaticism” around claims handling can help both parties, with some insurers taking that approach.

“There is an element to dispute resolution and claims handling that’s about making good judgment calls around when being pragmatic about resolving a claim – rather than necessarily doing it on what’s the most technically correct answer under the policy terms – in order to get the best consumer outcomes would ultimately be better for the insurer.”