The number of general insurance complaints received by the industry ombudsman rose 17% to 34,231 in the year to June 30, according to preliminary figures released today.

The Australian Financial Complaints Authority says a surge in add-on cover complaints was the main driver of the increase, while the industry overall has made progress reducing high case numbers.

Comprehensive motor cover was again the most complained about insurance product.

“Delays in motor vehicle insurance claims are increasingly driven by industry-wide shortages in parts and skilled labour,” chief ombudsman and CEO David Locke said.

“To maintain trust, insurers must effectively communicate these challenges transparently and proactively, helping customers navigate the wait with clarity and confidence.”

Motor insurance was among the three most complained about financial products overall, alongside personal transaction accounts and credit cards.

Consumer Action Law Centre senior policy officer Rose Bruce-Smith says it is “disappointing that general insurance and particularly claims handling continues to drive so many of the matters AFCA deals with.

“Persistent failures by industry to deal with their policyholders appropriately means the implementation of the General Insurance Code of Practice, incorporating all the recommendations from the [code] review and parliamentary flood inquiry, is more urgent than ever.”

AFCA says financial services complaints overall totalled 100,745 – the second year in a row the number has topped 100,000. But the 2024-25 figure is down 4% on the previous year’s record of 104,861.

“The movement is in the right direction, but receiving 100,000 complaints in a year is still unacceptably high,” Mr Locke said.

“We’ve now had three years of high complaints. Firms have more work to do to ensure fair responses to complaints are delivered earlier, without people having to take the extra step of coming to us.”

A rise in complaints about investments and advice and in general insurance outweighed falls elsewhere, AFCA says.

A spokesperson for the Insurance Council of Australia said: “Work is ongoing to continue to deliver a better experience for customers. Insurers will continue to work constructively with AFCA and government to improve processes and reduce complaint rates.

“Further work is being undertaken through a re-written code of conduct that will be contractually enforceable.”

Life insurance complaints were up 5% to 1518 across the year.

Council of Australian Life Insurers CEO Christine Cupitt said: “Things don’t always go right every time. We recognise that behind every complaint is a person who has felt let down, often during a distressing time. That is why our members are working every day to improve the customer experiences and provide a financial safety net during life’s biggest challenges.”

Full data will be available later this year, when the authority’s annual review is released.