Australia’s corporate regulator calls for better handling of insurance claims

(Reuters) -Australia’s corporate regulator said on Wednesday it had asked the country’s general insurers to improve their claims handling practices and resources after it found issues in multiple areas in a review.

The Australian Securities and Investments Commission (ASIC) has commenced several investigations related to claims handling practices after its review of more than 218,000 claims lodged with six insurers, including Insurance Australia Group, QBE Insurance and Suncorp, during January-March 2022.

The commission found insurers faced unduly pressure due to inclement weather events during and before the period. It also pointed out areas of improvement such as communications, project management and resourcing.

A spokesperson from QBE said in an emailed response that the company would continue to work to review and address industry concerns.

Youi Insurance, a private insurer part of the review, said it had considered the findings of the review and would identify opportunities for improvements in its claims handling processes.

Allianz Australia Insurance, another private player, said it had already taken steps to enhance customer communication and claims experience.

The company said it had more than doubled the size of its permanent catastrophe event claims team, in light of rising frequency of extreme weather events.

ASIC Deputy Chair Karen Chester said while not all factors which impact claims might be under the company’s control, the areas identified for improvement are within the hands of insurers.

A spokesperson with the Insurance Council of Australia said the industry would be looking closely at the issues covered in the report to drive further improvements to customer and community outcomes.

In 2022, more than 300,000 disaster-related claims lodged from four declared insurance events across the country, costing A$7.17 billion ($4.62 billion) in insured losses, according to the council.

Insurance Australia Group and Suncorp did not immediately respond to Reuters requests for comments.

($1 = 1.5513 Australian dollars)

(Reporting by Archishma Iyer and Rishav Chatterjee in Bengaluru; Editing by Shinjini Ganguli and Subhranshu Sahu)