The industry ombudsman has warned the use of artificial intelligence to lodge complaints could hinder its resolution processes, after caseloads reached record volumes in 2025-26.

“AI can help consumers articulate their concerns and structure their submissions, potentially making the complaints process more accessible,” the Australian Financial Complaints Authority says.

“As the use of AI grows, consumers and financial firms should ensure submissions remain accurate, relevant and focused on the facts of the complaint.”

The authority noted increased use of AI to prepare complaint submissions in 2025-26, and it says some “are significantly longer than necessary or include technical legal arguments, unsupported allegations or inaccurate references that do not reflect the circumstances of the complaint.

“This can make it harder for the parties and AFCA to identify the issues genuinely in dispute and resolve complaints efficiently.”

AFCA voiced similar concerns in April, and New Zealand’s Insurance & Financial Services Ombudsman Scheme has also flagged the issue.

The Australian authority’s annual review, released today, shows it received a record 119,949 dispute cases in 2025-26, confirming figures provided in August.

General insurance dispute numbers were up for the fifth straight year to more than 36,000 cases. The most complained about product was motor insurance, with 14,430 complaints lodged.

“General insurance complaints have increased every year,” AFCA chief ombudsman and CEO David Locke said. “While we recognise the impact of climate-related events and supply chain issues, insurers remain responsible for keeping customers informed, explaining delays and communicating clearly throughout the claims process.”

Brendan Ross, senior policy officer at the Consumer Action Law Centre, says five years of rising insurance complaints should be “a warning sign for the industry. Behind every complaint is a consumer who turned to their insurer after a loss event expecting support when they needed it most.

“Too often, delays, poor communication or difficulties resolving claims add to the stress, uncertainty and financial pressure consumers are already facing.

“At a time when the industry is redrafting the General Insurance Code of Practice, these figures reinforce the need for significantly stronger minimum standards to ensure consumers receive fair treatment, clear communication and timely claims handling when they need support most.”

AFCA says this financial year it “expects insurers to focus not only on managing complaints but also on addressing recurring causes, including claims delays, poor communication, inadequate explanations of decisions and inconsistent support for consumers experiencing vulnerability.

“Consumers are entitled to timely and transparent service and fair outcomes, despite the operational, economic and environmental pressures facing insurers.

“AFCA expects insurers to strengthen claims handling and internal dispute resolution, improve the quality and transparency of claim assessments, and use complaint data, AFCA decisions and systemic insights to improve their services.”