A record drop in the number of complaints referred to the General Insurance Enquiries and Complaints Scheme (IEC) was recorded during 2002/03, and there is a range of reasons why.

Since the IEC’s inception in 1991, the numbers of disputes steadily increased from year to year. But in the 2002/03 financial year, referrals fell 20% from 2557 to 2046.

CEO Sam Parrino says there is “no single reason” for this, but rather a combination of several factors. They include the continuing concentration of the market, improved internal dispute resolution schemes and continuing drought conditions, which led to a reduction in claims.

“Following the turmoil and disruption caused by what was truly an annus horribilis for the insurance industry in 2002, in 2003 we… entered a period of more benign conditions necessary for the industry to commence its financial and structural recovery,” he said.

The 25.7 million policies sold for the period generated just over 2 million claims, 11,504 of which were referred to the internal dispute resolution units – 0.5% of all claims. NSW recorded the highest percentage of disputes with 41% of the claims referred to the IEC, followed by Victoria (26%) and Queensland (15%).

The number of disputes settled in favour of consumers rose with 39% of all disputes settled in favour of the consumer, compared to 32% in the previous period.