Automation designed to streamline claims handling can inadvertently introduce risks such as communication failures and lack of alignment between teams, the Australian Financial Complaints Authority warns.  

AFCA head of systemic issues Joanna Sims says automation needs human oversight and outcomes should be routinely audited against policy intent.

“We continue to see systemic issues where a single error in, say, a logic rule or a document template or a claim status field produces hundreds of incorrect outcomes – often before anyone has even recognised it,” she told the ombudsman’s general insurance member forum.

“We have to confirm that decisions that are being produced are actually reflecting what the policy is promising.”

Ms Sims says tech should amplify accountability, not obscure it, but that is “sadly, the position we’re sometimes finding ourselves in, in terms of the complaints that are reaching us. When firms are able to close that policy loop between intent and the automated logic, that’s when automation stops being a risk multiplier and instead can act as a really important trust builder.”

Claims handling staff are still battling outdated templates, manual workarounds and inconsistent escalation pathways. But AFCA says automation aimed at improving processes is too often introduced mostly as a cost-saving exercise.

Ms Sims recommends establishing “feedback loops” between front-line staff, compliance departments and senior leadership.  

“That’s what turns policy into practice, that continual learning, not just a static sign-off.”

Customers need transparency and insurers must “explain what we’re doing in clear, human language”, and Ms Sims recommends reviewing complaint data “like it’s a mirror, not a scoreboard”.

“Those learning loops becoming part of the culture of an organisation ... That’s when trust becomes something that customers can actually feel.”