The Australian Securities and Investments Commission (ASIC) is encouraging home insurers to be consumer-centric in handling policy claims this summer, following a review into the handling outcomes for people affected by the summer bushfires in 2019-20.
Deputy Chair of ASIC, Karen Chester said the Commission wanted to remind all insurers that they must manage claims efficiently, honestly and fairly.
“To consumers, the real value of an insurance policy is tested when they need to claim,” Ms Chester said.
“It is important that claims are resolved quickly, that the process is consumer-centric, that repairs and rebuilds are timely, and that consumers are supported as well as possible after a disaster,” she said.
Ms Chester said ASIC’s review provided valuable insights on how well insurers performed on key consumer outcomes during the Black Summer bushfires.
She said there were some positive findings from the insurers’ data and in the action taken by individual insurers.
“While we identified areas for improvement, overall outcomes across the 8,801 claims revealed improved claims handling practices by insurers,” she said.
Ms Chester said that across the 8,801 claims reviewed, ASIC found 99 per cent determined by insurers were approved in-full or in-part; 88 per cent of claimants accepted the insurer’s decision within four months of lodging a claim; and 93 per cent of claims were closed, five per cent withdrawn and two per cent open, as at September this year.
“Nearly all claimants were afforded a temporary accommodation benefit (typically 1 year) under their policy,” she said.
“However, insurers reported that almost five per cent of claimants had used up all of their benefit by the end of January 2021.”
Ms Chester said ASIC’s review also found some insurers needed to make improvements to the quality, accuracy and reliability of claims information recorded in their systems, with quality issues including some data missing where ASIC would expect it to be reported, “for example, 97 claims were reported with a date of decision, but no decision was reported”.
