Insurers have welcomed an Australian Securities and Investments Commission review into claims management firms after concerns were raised over the sector’s business practices.

ASIC says the probe started in the first quarter of FY27 and will include those commonly referred to as “disaster chasers” – operators that the industry has frequently warned policyholders to be wary of following a catastrophe or weather event. 

“The concerns that have been raised with ASIC include sales and client acquisition practices, fee and cancellation arrangements, the role of firms in claims and complaints handling, and commercial relationships with repairers and other suppliers,” the commission says in a letter to industry outlining its 2026-27 general insurance priorities. 

“ASIC will review the practices of for-profit businesses that approach consumers and offer  assistance with home insurance claims, including in disaster-affected areas, to better understand the role these businesses play in the claims process and identify any practices that may result in consumer harm.” 

Insurers and claims management firms will be asked to provide information to the review, ASIC said. 

The Insurance Council of Australia, which has spoken out against claims middlemen in the past, welcomed the review.

"The industry and consumer advocates have raised concerns about poor conduct by some operators, particularly where vulnerable policyholders may face unclear fees, pressure to sign contracts or delays in resolving their claims," it told insuranceNEWS.com.au.

"This review will help identify harmful practices, improve transparency and ensure consumers can make informed decisions. Claims management firms that operate ethically and meet their obligations continue to have a legitimate role."

Claims management service Claims Hero supports “appropriate scrutiny” of the sector and has already engaged with ASIC regarding its business model and practices, MD Luke Dugdell says. 

“There are clearly operators in the market whose practices warrant scrutiny, and appropriate consumer protections are essential to ensure vulnerable consumers are not exploited or placed at further disadvantage,” he told insuranceNEWS.com.au. 

“It is important that the review distinguishes these practices from licensed claims management businesses that consumers independently seek out after their insurance claim has become complex, delayed or disputed. This is the part of the market in which Claims Hero operates.” 

Mr Dugdell says Claims Hero has urged the commission to examine why consumers are seeking professional claims representation. 

“The insurance industry needs to recognise that its own cash settlement practices are a significant reason consumers seek professional representation,” he said. 

“In the majority of cases, consumers come to us after the insurer has already initiated or proposed an insufficient cash settlement, rather than being pushed towards one by a claims representative, as some industry narratives suggest.” 

Click here for more from the ASIC letter.

Concern: disaster chasers can strike when claimants are vulnerable. Credit: IAG