The industry has defended its claims-handling timeframes during last summer’s flood disasters, telling a parliamentary inquiry processing delays in such circumstances are “inevitable”.

The House of Representatives Standing Committee on Social Policy and Legal Affairs inquiry into the insurance response to natural disasters heard evidence from a number of insurers in Sydney last week.

Committee Chairman Graham Perrett MP says the hearings allowed the industry to respond to criticism from policyholders and “explain how they might improve their claims-processing and assessing arrangements”.

Insurance Council of Australia CEO Rob Whelan told the inquiry that during events of this magnitude, processing delays are inevitable and there is “always room for improvement”.

The industry average timeframe from claims lodgement to decision during the Queensland floods was 28 days, with an average of 21 days for the Victorian floods and Queensland’s Lockyer Valley floods, and seven days for last year’s Melbourne storms and February’s Cyclone Yasi.

This compares to a benchmark for deciding claims of 10 working days or 14 elapsed days in the General Insurance Code of Practice. Mr Whelan told the inquiry that an amendment to the code to specify a different claims decision timeframe during natural disasters “is under consideration”.

But he ruled out the introduction of a benchmark timeframe for the completion and closure of claims due to the dependence on others in the repair and restoration chain such as tradesmen.

Giving evidence at the Sydney hearing last week, QBE revealed that across its brands it received in excess of 25,000 claims related to the disaster events. Of those 208 were escalated to internal dispute resolution (IDR) and 69 were referred to the Financial Ombudsman Service (FOS).

QBE GM Australian Intermediaries Shaun Standfield said the typical claims processing time at QBE is three days, but he admitted that during the disasters processing times increased to an average of 35 days for Queensland flood claims and 14 days for claims related to Cyclone Yasi and the Victorian floods.

Wesfarmers told the inquiry that received more than 9000 claims related to the disaster events were received across its brands, with 83 elevated to IDR and 19 referred on to FOS.

WFI CEO John Ripepi told the inquiry these figures were “consistent with normal business operations” and the company felt it had handled its claims and complaints well.

“We always endeavour to manage our claims process in a timely and effective manner,” he said, adding that allowances need to be made during periods of higher than average claims when the standards set forth in the General Insurance Code of Practice cannot be met.

Suncorp Head of Event Recovery Jimmy Higgins told the inquiry the group received around 130,000 claims across all brands over the disaster period.

He says the “majority” were assessed within eight weeks. “However, despite our best efforts, Suncorp is not suggesting that every customer is satisfied.”

Mr Higgins admitted that a significant number of Suncorp’s declined claims were a result of its AAMI brand not offering riverine flood cover, and added that steps taken to improve claims-handling response times since the disasters have included decentralising the claims response function and spreading it more evenly around the country.

BT Financial Group, which underwrites and administers all of the insurance businesses of the Westpac Group, told the inquiry that of the 6500 claims it received related to the disaster events, six were referred to IDR and only two were escalated to FOS.

GM Insurance Mark Smith said the fact that all Westpac policies offer full flood cover contributed to the low number of disputes. Timely resolution of claims was achieved because the company didn’t have to wait on hydrology or other technical expertise.

He says a “commonsense approach” to claims was adopted during the period. This included contacting claimants every 20 days with an update, which he says is a “key factor” in increasing customer satisfaction with the claims process.

Most of the insurers giving evidence at the inquiry identified communications with claimants as a key area for improvement in future disaster events.