The industry is still not doing enough to improve claims handling after the 2022 catastrophic floods, the Australian Securities and Investments Commission says. 

Use of independent expert reports is one of several areas requiring “more work”, according to the regulator’s latest review of the industry.

Another concern relates to the way cash settlement decisions are communicated to consumers. Many cash settlement fact sheets provide minimal information on the right to have a decision reviewed, and few clearly outline what the review process is or when the right of review expires, ASIC says.

The parliamentary inquiry into the 2022 floods made recommendations around the use of expert reports and cash settlements after consumer advocates and other stakeholders highlighted failures.

“Following the major floods of 2022, home insurers have told us they have improved their approach to claims handling, but they still have more work to do in responding to our concerns,” ASIC commissioner Alan Kirkland said.

“We expect all insurers to consider our findings and assess their claims handling programs against the better and poorer practices identified in our latest review, and not wait to be tested by another extreme weather event.”

ASIC examined the action plans of seven insurers between last August and this April following its 2023 review of home insurance claims handling.  

Other issues flagged in the latest review include weaknesses in resourcing, customer communications, identification of vulnerable customers, claims handling improvement programs and audits.

On expert reports, the review finds insurers did not have systemic approaches for overseeing the quality of independent reports and generally relied on claims handling staff, who may not have the required expertise to identify errors.

“Once a claims decision had been made, insurers did not have processes to check the quality of independent expert reports, nor the accuracy of decisions that relied on them.”

The seven insurers in the review are Suncorp, Allianz, Auto & General, Hollard, IAG, QBE and Youi.