Lead Ombudsman for General Insurance John Price cannot say why a sudden surge in complaints has caused a bottleneck at the Financial Ombudsman Service (FOS) – but he hopes it is not permanent.

He told insuranceNEWS.com.au FOS has received 2806 complaints in the past three months, a 20% increase on anticipated numbers.

If the bottleneck continues the service will have to employ more staff, forcing up the cost to insurers.

“We’re a non-profit, [so] we’re not designed to carry excess staff,” Mr Price said.

Last week insuranceNEWS.com.au reported how one broker had to wait 11 weeks before FOS could examine his complaint.

Mr Price says insurers also are experiencing higher demand in dispute areas.

“[Insurance] is such a volatile area. You can’t just pick it.

“It’s affected by natural disasters, hailstorms, fires and floods.”

While unhappy with the backlog, Mr Price says FOS is proud of the dispute resolution process introduced in July last year. The process aims to refer matters back to the industry, giving insurers an opportunity to reconnect with consumers.

“The overall average age of a dispute [across all financial services] is only 76 days, and that is down from 106 days before July 1 last year,” Mr Price said.

About 72% of matters that reach FOS are resolved by the parties through conciliation, conference or FOS preliminary review.

“Only 13% of matters that come through actually go through to a decision,” Mr Price said.

He says the fast-track system, which takes on simple disputes below $10,000 in value, takes an average of 45 days to resolve a case.

“About 48% of all our disputes go into our fast-track area.”

In light of the current backlog, FOS will fast-track urgent complaints, Mr Price told insuranceNEWS.com.au.

“We encourage people to tell us if there is a need to expedite the matter.”

He says people need to understand that the process can take time. “In the most complex of matters, they do take longer and do require a lot of investigation.”