Out of 104,000 complaints made to the Australian Financial Complaints Authority last financial year, only 584 – less than 0.6% – were about insurance brokers. This is despite brokers accounting for 6% of the AFCA membership.

“Compared to the more than 29,000 complaints about general insurance we saw in the same year, your volumes are very small,” AFCA CEO David Locke told the National Insurance Brokers Association Convention in Adelaide.

“In fact, many of you in this room have never interacted with AFCA.”

However, Mr Locke said it “would be a mistake to be complacent” and there are “common themes” in complaints against brokers.

“The most complained about issue for brokers is also the most complained about issue for general insurers, and that is about delays in claim handling,” he said. “15% of all complaints about brokers are about it taking far too long for your clients to receive a response to their claims submission.

“I know this is not always due to delay on your part. Still, this is not good enough. It is an area in which you can help by improving how you communicate with your clients.

“I encourage you all to review how you can help by keeping your clients up to date about the progress of their claim. If you know a claim is delayed due to unforeseen complexities, be transparent.”

Mr Locke praised the increasingly important role of brokers.

"You are a vital link in the chain between insurers and policyholders, responsible for placing just over half of the total insurance business each year," he said.

"Insurance costs are proving increasingly challenging, and we know many people are reducing insurance or going without it altogether. The role you play in exploring insurance options and helping people find and retain the right cover for them or their business is more important than ever."

As previously reported, Mr Locke also flagged the reputational impact of the ABC’s reporting on “appalling conflicts” in strata.

“This is an issue that resonates deeply with people and they know it’s not right,” he said. “This is not an issue that is just going to go away. While I know not all brokers in this room deal with strata insurance, these issues pose a very real risk to the reputation of the entire industry.”

A transcript of Mr Locke’s speech is available here.

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