The corporate regulator has put insurers on notice over claims handling after another summer of damaging weather events, as the Insurance Council of Australia admits systems are “operating at near capacity”.

The Australian Securities and Investments Commission (ASIC) has written to general insurance company chairs and CEOs, warning it expects “a significantly better response” after failings emerged in 2022.

Insurers say they have improved systems and processes after issues with delays and poor communication following the record-breaking 2022 floods, which have been examined as part of a recent federal inquiry.

The Insurance Council says this summer’s catastrophe losses have hit $1.2 billion, and in a recent newsletter CEO Andrew Hall said claims data is being monitored.

“With the ongoing extreme weather that continues to impact large parts of the country, customer needs remain insurers’ top priority,” he wrote. “[The Insurance Council] is carefully monitoring the claims data, as it is clear systems are operating at near capacity.”

ASIC has already singled out insurance claims handling as an enforcement priority this year, and its letter this week stresses insurers’ obligations.

“Given that severe weather events are expected to occur more frequently and with greater severity, it is increasingly important for general insurers to adhere to their obligations when responding to claims relating to such events,” it says.

“We recognise that insurers have told us they have implemented changes following the 2022 floods, including increasing resources for claims handling and dispute resolution.

“As a result, we expect to see a significantly better response by the industry to the events that have occurred during this summer, and any subsequent events.”

ASIC says insurers must also focus on resolving outstanding 2022 claims, and it will shortly be seeking “additional information” on those claims from some companies.

“Our message is that ASIC is watching how insurers support their customers very closely,” the letter says. “Evidence of significant misconduct … may result in enforcement action.”

Click here to read the full letter.