September 11, the Ansett Airlines and OneTel collapses, the HIH Royal Commission, Enron and WorldCom corporate collapses, the global capital shortage, a loss of consumer and investor confidence in the insurance industry and greater government regulation: they all feature as major disturbances to the industry in Insurance Enquiries & Complaints’ latest annual report.

As CEO Sam Parrino puts it: “What the industry has experienced can be likened to a bushfire, and like a bushfire, some good may come out of it.”

Perhaps some of that good has already come in the form of improved claims performance by insurers. The report showed better results from insurers’ claims practices. With more than 26 million policies issued in the past year, and more than 2.6 million claims made, only 13,652 disputes were referred to insurers’ internal dispute resolution services, and thereafter only 2,537 were referred to the IEC for resolution.

Allegations of fraudulent behaviour by insurers have also fallen to 11%, compared to 13% the year before.

Still, there was an increase of 0.5% in matters referred to IEC, but it was lower than the previous year’s increase of 9.4%. “Such a levelling off makes a welcome change from the perennial increases, although time will tell whether this result is part of a general trend,” Mr Parrino said. “I would like to think insurers’ IDR units have played a major part in this result.”

The report found the major reasons claims were denied were because they failed to meet policy terms, because conditions or exclusions had been applied or because there was material non-disclosure by the claimant.

The report also covered the importance of the industry’s self-regulatory General Insurance Code of Practice, which is currently being reviewed to bring it in line with the FSRA.