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General insurance complaints up 17%, AFCA figures show

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General insurance disputes received by the Australian Financial Complaints Authority (AFCA) increased to 19,103 last financial year, according to its annual review published today.

This figure is second only to banking and finance (46,820 complaints), and makes up 24% of the 80,546 complaints received in total. AFCA says there was a 17% increase in the average number of general insurance complaints received each month in 2020, compared to 2019.

Some 17,564 general insurance complaints were closed, with 70% of them resolved by agreement or in favour of complainants. Of the closed complaints, 8389 were closed at registration and referral, 5185 at case management, with 1944 going though to the final decision stage.

More than $62.6 million in compensation and refunds was awarded, and the average time taken to close complaints was 77 days.

Most complaints received were about delays in claim handling (3521), followed by the claim amount (3171), and denial of claim due to an exclusion/condition (3032).

Insurers received the highest number of general insurance complaints (15,568), followed by underwriting agencies (2195).

The most commonly complained about products were motor comprehensive (4104), home building (3616), travel (3168), motor uninsured third party (1189) and home contents (946).

“A high number of complaints that came to AFCA this year were from complainants contacting AFCA directly, before contacting their insurer for an internal dispute resolution,” the report says.

“This was driven by the rise in issues around cancellation of travel plans and premium refunds, as a direct impact of the COVID-19 global pandemic.

“AFCA also received 404 complaints about small business insurance, which is a significant increase to the 195 complaints received last year.

“These included complaints related to business interruption, commercial vehicles, commercial properties, land and machinery.”

The review also reveals that 82 general insurance complaints were received in relation to last summer’s bushfires.

“AFCA’s overall observation on claims handling during the 2019/20 bushfires is that insurers and other financial firms were proactive in addressing issues and offering resolutions for consumers and small businesses,” AFCA says.

“This resulted in fewer complaints being lodged with AFCA than expected, and a faster dispute resolution timeframe.”

Travel insurance was the most commonly complained about product (1543) in relation to the COVID-19 pandemic.

Click here to read the full report.