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Insurers Should be More Consumer-Centric

Friday 3 December 2021
Insurers should take a more consumer-centric approach just as Australia heads in bushfire season.

Australian Securities and Investments Commission (ASIC) Deputy Chair Karen Chester said in an official statemen this week, ‘With summer upon us, we want to remind all insurers they now must manage claims efficiently, honestly and fairly. To consumers, the real value of an insurance policy is tested when they need to claim. It is important that claims are resolved quickly that the process is consumer-centric, that repairs and rebuilds are timely, and that consumers are supported as well as possible after a disaster.’

The securities and investments regulator conducted review of how insurers performed during the ‘black summer’  fires and found a number of  good practices which they wished the industry would adapt more broadly:

  • Responding swiftly to the event, tracking bushfires, and proactively contacting customers in affected areas, encouraging them to lodge a claim or even evacuate
  • Paying the maximum temporary accommodation benefit at the outset of claims assessed as a ‘total loss,’ to provide certainty to those claimants
  • Making product design changes to broaden policy coverage for fire damage, and effectively making this change retrospectively, and
  • In advance of the upcoming disaster season, undertaking simulation exercises to stress-test a response to simultaneous disasters, including how insurers will respond in a pandemic to allow for assessment and emergency repairs to property.
However,  the regulator indicated that there was room for improvement  when it comes to quality accuracy and reliability the claims in their systems.

The regulator said in statement, “Insurers’ data had quality issues including some data missing where ASIC would expect it to be reported (for example, 97 claims were reported with a date of decision, but no decision was reported).”