The Australian Securities & Investments Commission published a follow-up review of seven home insurers’ action plans after its 2023 assessment of home insurance claims handling, finding that while insurers have implemented improvement programs and made progress, outcomes remain inconsistent and significant gaps persist. ASIC warned that without further work there is a continuing risk of consumer harm and potential breaches of Australian financial services licensee obligations and the General Insurance Code of Practice. The review, which commenced in August 2024 and covered AAI (Suncorp brands), Allianz, Auto & General, Hollard, Insurance Australia Group, QBE and Youi, highlighted weaker oversight of independent experts (such as engineers and hydrologists) than for builders and repairers, with quality assurance often focused on timeliness rather than accuracy and limited post-decision review. ASIC also pointed to inadequate consumer information on cash settlements, including limited disclosure of review rights and processes, and noted that rising resourcing has not necessarily kept pace with increases in internal and external dispute resolution case volumes. Other recurring issues included reliance on manual controls to meet Code communication timeframes, vulnerability identification improvements that are not always applied across the claim lifecycle or extended to third parties, inconsistent program governance and metrics that can limit board oversight, and audit approaches that focus on random file sampling rather than thematic deep dives. ASIC noted continued high levels of reported Code breaches, with 29,021 home insurance breaches reported by subscribers for 1 July 2023 to 30 June 2024. ASIC called on insurers to assess their claims handling programs end-to-end against observed better and poorer practices and make meaningful improvements, and reiterated that insurance claims handling remains an enforcement priority in 2025. It referenced proceedings commenced on 11 April 2025 against Hollard Insurance Partners Limited alleging a breach of the duty of utmost good faith, and said investigations into other matters relating to claims arising from the 2022 floods are continuing.
Australian Securities & Investments Commission 2025-06-05
Australian Securities & Investments Commission finds home insurers’ claims handling improvements still fall short and flags enforcement focus
ASIC's follow-up review of seven home insurers revealed inconsistent outcomes and gaps in claims handling. Despite improvement efforts, issues included weak oversight of experts, inadequate consumer information, and rising disputes. Reliance on manual controls and inconsistent governance were noted. With 29,021 Code breaches reported, ASIC urged better claims handling and prioritized enforcement for 2025, citing ongoing investigations against Hollard Insurance Partners Limited.