The insurance industry is increasingly using conciliation to settle complaints to the Financial Ombudsman Service (FOS).

The method means matters are resolved earlier and companies have a better chance of retaining customer loyalty, according to FOS EGM Specialist Resolution Group Jamie Orchard.

“If you resolve it quickly and through the parties talking, you are much more likely to maintain that relationship,” he told insuranceNEWS.com.au.

An insurer that used conciliation to resolve 30 Queensland flood disputes later reported the customers had renewed their policies, he says.

Opposing parties can work together to find a tailored solution that may not easily be categorised as a win or loss for either side, according to Mr Orchard.

Everyone must be satisfied with the outcome, so the result may be more nuanced than if FOS made a decision.

Conciliations last “because both [sides] understand how they reached that point and understand the nature of the resolution and are content with it”.

The insurance industry in particular has embraced conciliation, Mr Orchard says.

General insurance comprises almost half the FOS conciliation team’s caseload and the strong resolution rate reflects the industry’s positive approach.

In the financial year to June, 400 insurance disputes went to conciliation and 70% were resolved, with the remainder going to a decision.

This compared with 250 insurance disputes conciliated in 2011/12.

Mr Orchard says trained mediators are aware complainants may consider themselves at a disadvantage in talks with insurance staffers.

“They pay a great deal of attention to ensuring the process works in such a way that neither side is advantaged.”

FOS surveys parties three weeks after every conciliation conference, and Mr Orchard says the feedback has been unfailingly positive.