Home / Life Insurance / Stop ignoring complaints, regulator tells NZ life insurers
13 May 2019
The Financial Markets Authority in New Zealand has urged life insurers to respond more systemically to customer complaints, to uncover flaws in their product design, company conduct or processes.
Director of Regulation Liam Mason says too many life insurers accept customer complaints as a performance indicator, and treat a low number of complaints as a measure of good conduct.
Front-line staff empowered to solve customer issues are failing to record complaints, meaning opportunities to identify problems are missed, he says.
“The real value of complaints is going to be realised only through careful analysis of the root causes – the product design, system or conduct issues that led to the symptoms complained about. This needs to be combined with a willingness to invest in fixing those root causes, not merely addressing symptoms.”
Mr Mason has expressed disappointment at the number of life insurers that think the Hayne royal commission is only about banking in Australia, and has nothing to do with them.
The same issues revealed in testimony before the commission are present in some New Zealand business models, he says.
He has also criticised the lack of board involvement in setting company culture and conduct. Board members are not seeking information that will educate them about customer outcomes and treatment, he says.
And systems for customer complaints are underinvested, poorly embedded and inconsistently used. Insurers must have appropriate systems to record and resolve complaints, Mr Mason says.