Brokers are warning that many insurers’ claims services have deteriorated significantly following a “perfect storm” of challenges.

Some say the situation is the worst they have seen during their careers, with one senior broking source labelling it “a horror show”.

There is, however, also an acceptance that front-line insurance staff are doing their best under difficult circumstances.

MGA’s Claims and Communications Coordinator (Operations) Mark Fitzgerald told insuranceNEWS.com.au that the recent flood catastrophe, which has resulted in more than 160,000 claims so far, has “tipped insurers over the edge”, coming on top of existing compliance, staffing and supply chain issues.

He says brokers are waiting up to two hours on the phone and up to a month for replies to emails, and that even simple cash-settled claims have to negotiate the administrative maze.

“There’s a settlement letter that needs to go out, and so those simple claims go back into a phone and email system that is already clogged,” he says.

Mr Fitzgerald says that offshore call centres returning to Australia after the pandemic has caused complications, and that less time is spent training new recruits than in years gone by.

Covid has added another layer of complexity, with loss adjusters, builders or clients regularly going down with infection and delaying the process.

“These are unfortunate circumstances and it really is the perfect storm,” he said. “And we have to expect that in the coming months it is going to get even worse.”

The Insurance Council of Australia (ICA) says 11 declared catastrophes over the past two years, including covid, are having an "ongoing" impact on the claims process.

It says factors that have impacted the claims management process have included:

· The volume of claims being managed by insurers. Including the current floods, since the Black Summer of 2019/20 there have been more than 720,000 disaster-related claims reported from 11 declared insurance catastrophes totalling more than $11 billion in insured losses

· Internal border restrictions, which constrained the deployment of insurance catastrophe responders to impacted communities, an effect which is still being felt

· Almost zero immigration severely constraining the availability of tradespeople and other specialists relied on by insurers

· International and local shortages of building materials, both manufacturing and supply chain

· Increased competition for available tradespeople and specialists from a ‘hot’ construction market

· Complex repairs and rebuilds to properties impacted by recent extreme weather events, many in remote areas of Australia with difficult accessibility.