The General Insurance Code Governance Committee has released its annual data and compliance report – and there are some concerning trends.

Here we outline the most significant findings from the 2024-25 financial year.

Breaches on the up again

The number of breaches had been rising for several years, sparking concern on the committee.

It peaked in 2022-23 at 77,886, before dropping sharply in 2023-24 to 58,385 (previously recorded at 67,394 before an insurer flagged more than 9000 over-reported breaches).

However, in this year’s report, breaches rose 21% to 70,325. There were 114 significant breaches, compared with 115 the previous year.

Insurers blamed 54,157 of the breaches (77%) on staff negligence or error, with 5073 down to inadequate human resources and 4078 caused by a policy or process deficiency.

The financial impact of breaches dropped 14% to $1.33 million, but the committee warns against reading too much into this.

“Financial impact provides one indicator of the consequences of breaches, but it does not provide a complete picture because many breaches involve failures in the quality or timeliness of service and do not result in a direct financial loss.”

Claims concern

Claims handling commitments were the largest source of breaches, accounting for 59% of the total.

Some 41,140 breaches related to part eight of the code, “making a claim” – a 33% increase on the previous year.

The commitment to provide updates at least every 20 business days on the progress of a claim (paragraph 70) was the most problematic obligation. It was breached 18,350 times, compared with 10,989 the previous year.

Committee chair Veronique Ingram says claims delays have “a real impact” on customers dealing with loss or disruption.

“When customers make a claim, they are often dealing with stressful and uncertain circumstances,” she said. “Delays in updates or decisions can add to that stress and make it harder for people recover and move on.”

Missing data

The committee asked insurers to provide further detail around claims delays and report by how much they exceeded the required timeline.

Only 19 insurers were able to provide this information.

“The median reported delay ranged between 10 and 14 business days beyond the required time frame for four of the code commitments,” the report says.

“Delays of two to three weeks may result in significant distress for customers, particularly those experiencing substantial loss or circumstances of vulnerability.”

Some insurers reported “concerning average delay lengths” of up to 156 days.

The committee says missing data “constrains insurers’ ability to identify systemic issues. Where breaches occur frequently, insurers should assess whether these reflect systemic weaknesses rather than isolated staff errors.”

It expresses concern about staff error being the top cause of breaches for the fifth consecutive year.

“These included cases involving high volumes of repeated breaches, which typically indicate the presence of underlying systemic issues rather than isolated individual errors. This suggests that underlying systemic issues may not be properly identified, addressed or reported.”

Vulnerable customers

The committee says supporting customers experiencing vulnerability and financial hardship “remains a critical focus area”.

Breaches of “part 9: supporting customers experiencing vulnerability” dropped 11% to 1540, and breaches of “part 10: financial hardship” fell 6% to 400.

While the drops are positive, the committee says it’s also important to look at complaint numbers.

Complaints relating to vulnerability increased by 70%, while complaints relating to financial hardship increased by 119%.

“By comparison, overall complaints across the industry increased by 30%, indicating that complaints in these areas are increasing at a faster rate than complaints overall,” the report says.

Variation across insurance classes should also be assessed. Motor insurance accounted for 56% of vulnerability-related breaches, up from 39% two years ago.

“This trend underscores the need for insurers to strengthen their approach to identifying and supporting vulnerable customers during motor insurance claims, in addition to high-profile areas such as disaster-related home insurance claims.”

Industry overview

The 45 insurers subscribed to the code accounted for $39.2 billion in premium received for retail insurance (up 12%) and 41.6 million policies issued (up 4%).

They have a workforce of 156,287 (up 14%) and 4.5 million claims were accepted from 5.7 million claims lodged. Some $19.4 billion was paid in claims (up 5%).

About 1.8 million complaints were received (up 30%), with 59% relating to buying insurance. Motor insurance received the most complaints, accounting for 57% of the total.

Read the full report here.