The Australian Financial Complaints Authority (AFCA) has urged general insurers to review the way expert reports and submissions are prepared after a rise in “complex” general insurance disputes.

AFCA says the proportion of complex cases proceeding to the final stage of the complaint resolution process, that is when a binding determination is made, has increased from 43% to 57% this financial year to date. 

“We’re seeing more and more complex complaints in general insurance…with the most complained about issue being delay, this only adds to the complexity of the underlying claim issue,” Lead Ombudsman Insurance Emma Curtis said. 

“And we also think that the complexity of the issues is increasing, and we also think that the length and the number of expert reports being used and submitted to us is increasing.” 

General insurance disputes soared 50% to 27,924 in the last financial year and the number of complaints about general insurance claim delays went up 66% to 7953. The top issue covering all financial services complaints to AFCA was delay in insurance claim handling, which went up 76% to 10,996. The figure includes life insurance. 

Ms Curtis says expert reports are often key to resolving complex complaints and she urged insurers to “carefully consider” how the reports are being used and written so as to reduce the chances of a lengthy dispute process. 

“Quantity is not the answer here. It’s about the quality of the report. We ask you to carefully consider the relevance and the strength of every expert report that you are seeking to rely on,” Ms Curtis said on Friday at the AFCA Member Forum general insurance session. 

“Do the expert reports that you’re submitting clearly support your position? Do they explain a clear link between the cause of the damage and the exclusion that you may be seeking to rely on? 

“Do the reports clearly and succinctly address all key arguments raised by the complainant and their experts? In your reports, keep the language and your submissions factual and neutral and in plain English, identify all the relevant issues and address them clearly and concisely. 

“And remember to write for the complainant which could help to persuade them of your position and help resolve the complaint earlier.” 

She says complex complaints can be much harder to resolve if the complainant feels that the insurer’s engagement is poor, or if trust has been lost. 

“So we urge insurers to engage in a fair and transparent assessment and claims process along with clear consistent and regular communication,” Ms Curtis said. 

“Even if there are delays in the claims process, regular communication goes a long way to helping to keep your customers engaged and understanding of the challenges that you may be facing [such as] sourcing materials and resources.” 

Ms Curtis says AFCA is planning to update its approach paper on disclosure and misrepresentation and expects to consult with stakeholders some time next year. 

“We’ve been sort of testing our approach to that in practice, and we now have developed an informal internal position which we want to turn into an external approach which will be published,” she said. 

“Before we can do that, we want to go through a consultation process, a robust public consultation process. So we're planning to do that early next year.” 

She also provided an update on business interruption (BI) disputes related to pandemic cover. AFCA has received to date 404 BI complaints and has “made really good progress” with the caseload. 

“We’ve got 164 that are still open…but the majority of those we actually have to keep them on hold for the moment because there’s a number of class actions that are in the courts so we can't progress those until the court process has been finalised,” Ms Curtis said.  

“So we have issued 39 decisions to date and over 100 have been resolved by negotiations between the parties. So we're really happy with our progress on that.”