Meeting claims handling timeframes an ongoing challenge for general insurers

The latest report released by the General Insurance Code Governance Committee (CGC), highlights ongoing challenges in meeting claims handling timeframes.

The latest report released by the General Insurance Code Governance Committee (CGC), highlights ongoing challenges in meeting claims handling timeframes for the general insurance industry.  

The Annual Data and Compliance Report, published recently, noted an increase of 16% in claims-handling breaches of the industry Code of Practice during the 2022-23 reporting period, totalling over 45,000 breaches. 

Ms Veronique Ingram, Chair of the CGC, acknowledged the increased volume of claims during the year while expressing deep concern over the findings.  

"Claims handling timeframes are crucial for customer wellbeing. It is troubling that we saw such significant numbers of breaches in this reporting period," Ms Ingram remarked. 

The report identified insufficient resourcing, training, and technology investment by insurers as key factors contributing to the breaches. Ms Ingram emphasised the need for insurers to address these underlying issues, stating, "Addressing these issues will lead to better outcomes for customers." 

Interestingly, the report noted that a small group of insurers were accountable for the majority of breaches, while others successfully reduced breaches related to claims handling timeframes. Ms Ingram commended the positive steps taken by some insurers, urging all insurers to review and enhance their claims handling procedures and customer communications. 

“We welcome the positive steps, and we know that some insurers have worked hard on reducing breaches in this area following reports in recent years from Deloitte, ASIC and the CGC,” Ms Ingram said. 

The report also highlighted a 61% increase in reported complaints, marking this the fourth consecutive year of escalation. Ms Ingram attributed this increase in part to an expanded definition of complaints, but also pointed out its correlation with the rise in claims-handling breaches. 

"It is a consequence of the increase in claims-handling breaches. As we see the breaches go up, we see more complaints come in,” said Ms Ingram. 

Insurers were urged to analyse their complaints data to identify areas for improvement, particularly in claims handling and communication delays. The report emphasised the importance of adequately resourcing complaints handling functions and investing in technology to streamline processes. 

Ms Ingram reaffirmed the CGC's commitment to engaging with insurers on areas of concern. 

"We expect insurers to consolidate the progress made in the coming year," she concluded. 

Read the full Annual Data and Compliance Report 2022-23 here.