ASIC Identifies Major Gaps in Insurers' Complaint Handling Processes

Key issues identified in the review include the failure to recognize one in six customer complaints, inadequate identification of systemic problems, missed communication timeframes, and underdeveloped systems that fail to record outcomes such as compensation payments. These shortcomings highlight a concerning gap between regulatory expectations and current industry practices.

ASIC Commissioner Alan Kirkland expressed disappointment over these findings, especially considering previous advisories for improvement following the 2022 Queensland and New South Wales floods. He emphasized the necessity for insurers to cultivate a positive complaints management culture that values customer feedback and proactively addresses recurring issues.

In response to these findings, ASIC plans to provide individual feedback to the participating insurers, requesting detailed action plans to rectify the identified deficiencies. The commission has also indicated the possibility of further regulatory actions if these issues are not adequately addressed.

For tradespeople and small business owners, these revelations underscore the importance of choosing insurance providers that prioritize effective complaint handling and customer service. When selecting an insurer, it's advisable to inquire about their complaint resolution processes and track record in addressing customer concerns. Ensuring that your insurer is committed to continuous improvement and regulatory compliance can provide peace of mind and assurance that your interests are well-protected.

In conclusion, ASIC's review serves as a critical reminder for the insurance industry to uphold high standards in complaint handling and customer service. For consumers, particularly those in the trades sector, being vigilant and informed when selecting insurance providers is essential to ensure that their coverage needs are met with professionalism and responsiveness.