The Australian Securities and Investments Commission says the industry has been “put on notice” after it listed the handling of weather-related claims as one of several focus areas.

ASIC released its 2024-25 corporate plan last week, outlining its intention to scrutinise responses to home policy claimants and products that are “harmful” to consumers.

“Our plan should send a clear message to insurers that they are on notice,” commissioner Alan Kirkland told insuranceNEWS.com.au.

He says the regulator will continue to look closely at the way the industry helps people in need and will not hesitate to take enforcement action against misconduct.

The industry came under heavy criticism following the February and March 2022 east coast floods, Australia’s costliest insured catastrophe, with claims totalling at least $6.3 billion.

“When we examined how insurers had handled claims resulting from the major 2022 floods, we found problems with communication, management of contractors and resourcing of claims handling,” Mr Kirkland. “Insurers have been telling ASIC they implemented improvements in response to that report and following some of the severe weather events we saw last summer, we want to understand whether that is the case.”

Last year, ASIC published findings on the industry’s claims handling practices based on analysis of six insurers that account for 63% of the market.

The review involved claims from the 2022 floods, and ASIC called on insurers to address weaknesses identified. Resourcing of claims handling and dispute resolution were identified as areas requiring immediate attention.

ASIC’s corporate plan says improving consumer outcomes is one of five strategic priorities this financial year. This will include a focus on the design and distribution of financial products, insurance claims handling and dispute resolution.

“We will take action against insurers in relation to claims handling, especially in relation to home insurance claims,” the plan says. “We will also take action in response to harmful product design and distribution practices, including conduct that results in consumers receiving unsuitable products ... we will also monitor general insurers’ improvements to claims handling and engage with the independent review of the 2020 General Insurance Code of Practice.”

See ASIC’s corporate plan here.

From Insurance News magazine: As the US grapples with unprecedented fire, flood and storm risks, what lessons can Australian insurers learn?