A pilot trial to “measure and test” a different approach to deal with dispute cases that appear to lack merit will be made permanent, the Australian Financial Complaints Authority (AFCA) says in its 2020/21 annual review report.

AFCA conducted the trial in response to feedback from a number of its members, particularly those running small- and medium-sized businesses that, at times, they are faced with complaints lodged against them that, on the surface, look to be unfounded.

“We have listened to this feedback and taken action,” Chief Ombudsman and CEO David Locke said. “Using our existing Rules, we established a new process to better scrutinise complaints at the very early stages of our process.

“This pilot saw both the time taken to resolve the complaint reduced, along with the cost associated. We believe this has demonstrated the process is faster, cheaper and fair to all parties involved.

“We are making this change a permanent feature of our scheme.”

Released last week, the annual review says 16,912 general insurance complaints were lodged in the year to June 30, making up about 24% of overall disputes received. Banking and finance accounted for the largest share of cases lodged, at 60%.

Comprehensive motor dominated the general insurance complaints list by product, with 4386 disputes, followed by home building (3527), travel (2477), home contents (1079) and motor vehicle - uninsured third party (934).

About 8303 COVID-related complaints were submitted during the period, compared to 5013 over the four months at the end of the previous financial year after the pandemic was officially declared.

AFCA says the past 12 months included 165 complaints related to insurance cover held by small businesses for business interruption associated with COVID-19.

Travel and business interruption were the most common pandemic-insurance complaints although the former saw a 22% decline due to the national border closures.

“AFCA worked closely with travel insurers to effectively manage complaints about COVID-related travel insurance claim declines and requests for premium refunds,” Lead Ombudsman Insurance Emma Curtis told insuranceNEWS.com.au.

She says AFCA also is continuing to work with insurers and consumers affected by recent natural disasters to ensure complaints are dealt with efficiently.

Click here for the Datacube for details by insurance provider who have four or more complaints during the period.