Insurers should introduce “immediate and enduring” increases in resourcing of claims and complaints resolution teams, the Australian Financial Complaints Authority (AFCA) says. 

The recommendation is one of four made by AFCA in its submission to a Federal Government inquiry into insurers’ responses to unprecedented claims resulting from flood events across Queensland, NSW, Victoria and Tasmania last year. 

AFCA received 3477 related complaints between February 2022 and September 30. It is still receiving complaints. 

The magnitude of the record floods placed enormous pressure on insurers, AFCA says, acknowledging the “hard work and commitment of claims and complaints handling staff within general insurers”. 

The recommendations are intended to support the capacity and performance of insurers in the future, it says. 

"The reality of climate change and land use patterns in Australia means these events will likely become more common and continue to have significant effects on Australian communities. Being able to juggle 'business as usual’ claims with natural disasters must be part of the way we all work,” AFCA said. 

The submission urges insurers to improve communications with insureds about claim progress, and to recognise the "particular trauma and uncertainty” of those affected by natural disasters. 

"Better communication can reduce complaints and restore trust,” it said. 

Another recommendation is that there be general improvements relating to reliance on expert reports in flood events, and the fourth was that there be strong standards beyond the General Insurance Code of Practice (GI Code).  

“We understand the very real challenges – both practical and human – in dealing with complaints relating to natural disasters. 

“AFCA believes that insurers need to resource and improve their claims processes to reduce delays and – where this is unavoidable – to communicate regularly and effectively.” 

AFCA still had 561 related open complaints at September 30. The top six general insurers accounted for 77% of major flood claim complaints received. 

See the submission here.