The General Insurance Code Governance Committee says a fall in the number of breaches of key obligations suggests “signs of improvement” in compliance frameworks.

After three years of rises, the committee’s annual data report, published today, shows overall code breaches dropped 13% to 67,394 in 2023-24, with significant breaches also falling.

There were drops in breaches around claims and complaints. Breaches increased in other areas, including identifying vulnerability, but the committee says this could show enhanced monitoring and understanding of these issues.

However, persistent issues in identifying and addressing the root causes of breaches and a surge in complaints “reflect a need for more substantial improvements”.

Committee chair Veronique Ingram says she is optimistic about increased reporting of breaches in previously under-reported areas.

“This is an encouraging sign that insurers are becoming more proactive in identifying and addressing certain compliance gaps,” she said. “Better oversight and more rigorous reporting indicate a shift towards stronger industry standards.”

But she adds that “simply flagging these breaches isn’t enough”, and greater assessment of root causes is required.

“Insurers must go further and look at what is causing the breaches so they can implement long-term, sustainable solutions. Insurers must examine their systems and workflows, explore technological improvements, and ensure staff are adequately trained to identify issues. It is crucial that insurers can prevent issues before they arise.”

The report also highlights an 18% increase in the number of complaints, largely driven by disputes over motor insurance claims and premium increases. 

“Many of these complaints were resolved in favour of customers, raising questions about whether better communication could have prevented them in the first place,” the committee said.

See ANALYSIS.