Insurers have made mixed progress acting on Deloitte’s recommendations to improve catastrophe responses, with more work required in several areas, an update report released today says. 

The Insurance Council of Australia appointed Deloitte to review the industry’s response to the record floods that struck Queensland and northern NSW in 2022, with findings and seven recommendations delivered in late 2023.

The follow-up Deloitte progress report says substantial investment and resources have been committed by insurers, but more work is needed in areas such as communication, technology and data improvements. 

“For most insurers this is largely because more transformational changes take time and significant investment of resources to deliver, particularly as they relate to technology and infrastructure programs,” Deloitte says. 

The report says insurers with longer timelines to implement recommendations will face challenges similar to those experienced during the disaster known as CAT 221 if another large event occurs in the near future. 

“A small number of insurers have not started to upgrade their technology platforms and may continue to face challenges during large catastrophes with manual processes, lack of digital options for consumers and data quality issues,” it says. 

Deloitte says many insurers feel changes to planning, communications, resourcing and technology enable them to provide more consistent experiences to customers through events, and that this is coming through in their reporting and customer experience scores.  

But they recognise that a catastrophe on an unprecedented scale would put strain on an industry-wide response. 

“Notwithstanding the industry’s progress made to implement the recommendations, consumer representatives told us that in recent events they have not observed any material improvements in the way insurers handle claims and associated complaints, with many of the issues remaining consistent between event seasons,” Deloitte says. 

Recent reports and investigations completed by the Australian Securities and Investments Commission and the Code Governance Committee on claims and complaints handling also found issues with customer experience. 

Deloitte says there are early indications that improvements are translating to tangible changes in claims experiences, but it will take some time before customers feel the full benefits.  

“Given the quantum of change impacting insurers over the next few years, focus should not be lost on ensuring these programs are completed as designed,” it says. 

ICA has also developed action plans to address the Deloitte recommendations, with the aim of a mid-2025 completion date. 

Deloitte says some of that work has been completed but steps in relation to co-ordination with government and external stakeholders has an undefined timeline, partly because the government needs to respond to parliamentary floods inquiry recommendations before a formal action plan can be agreed on and implemented. 

ICA says work will continue in areas requiring ongoing attention, along with the full suite of recommendations from both the floods inquiry and the review of the code of practice. 

The report is available here.

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