Life Insurance Australia :: News
SHARE

Share this news item!

AFCA Criticizes Insurance Industry Over Delayed Dispute Resolution

AFCA Criticizes Insurance Industry Over Delayed Dispute Resolution

AFCA Criticizes Insurance Industry Over Delayed Dispute Resolution?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The Australian Financial Complaints Authority (AFCA) has expressed its deep concern on the rising complaint numbers and poor industry response, leading to significant dispute resolution delays.
The CEO and Chief Ombudsman, David Locke, warned that complaint numbers could reach 100,000 in the current financial year, an increase from 72,358 in the previous year.
The surge in complaint numbers resulted from natural catastrophes, complaints about claims handling and an increase in banking sector-related scams.

The delayed resolution of complaints has resulted in significant frustration among policyholders, brokers, and other stakeholders. Insurance brokers have reported extensive delays, with one residential claim taking as long as nine months to be resolved. The issue has been ongoing for a while, with AFCA issuing an apology last year for the protracted delays. However, the problem has persisted.

AFCA is worried that the continuous rise in volumes of complaints – most notably delays in claim handling – will hamper its ability to resolve disputes promptly and efficiently. Thus, Mr. Locke advocates that firms focus on exploring ways to resolve complaints in the early stages of their process, or before they reach AFCA. 

He notes that fewer complaints are being resolved after referral back to the financial firm, while more members are asking for extensions or not responding to complaints within the timeframes outlined. The Internal Dispute Resolution (IDR) is the first step, while External Dispute Resolution (EDR) was not designed to be "the only avenue for redress." Nevertheless, Mr. Locke insists that deep concern exists with firms not meeting their IDR and EDR obligations.

AFCA is undertaking several steps to tackle delayed dispute resolution, such as using technology solutions to expedite processing, reassigning staff to high-impact product areas, batching complaints and standardizing responses, and regularly updating complainants on the status of their complaint. However, these efforts will come at a cost to members.

AFCA's annual review for the year to June 30, 2022, noted that it takes an average of 72 days to close a complaint, but this statistic includes all complaints, not just those that go to determination. Around 3% of complaints take more than a year to resolve. The Insurance Council of Australia has acknowledged that the record flood event last year, which resulted in almost 240,000 claims, was an already stretched system of claims.

Finally, a lot more disputes have been resolved through internal dispute resolution processes, and the industry will pay close attention to the issues brought out through the external AFCA process. Therefore, the financial services industry needs to tackle the issue of delayed dispute resolution to ensure that complainants' expectations are met, customer satisfaction is guaranteed, and the industry's reputation remains solid.

Published:Monday, 20th Mar 2023
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

NSW Productivity Commissioner Advocates for Immediate Ban on Strata Manager Commissions
NSW Productivity Commissioner Advocates for Immediate Ban on Strata Manager Commissions
22 Apr 2026: Paige Estritori
In a significant development for New South Wales' housing sector, Productivity Commissioner Peter Achterstraat has called for the prompt elimination of commissions received by strata managers. This recommendation aims to bolster transparency and affordability within the state's burgeoning strata housing market. - read more
CHU's 2025 Strata Market Report: Stability in Strata Insurance Amid Rising House Insurance Costs
CHU's 2025 Strata Market Report: Stability in Strata Insurance Amid Rising House Insurance Costs
22 Apr 2026: Paige Estritori
In its recently released 2025 State of the Strata Market report, CHU, Australia's leading strata insurance underwriting agency, provides an insightful analysis of the current landscape of strata insurance. The report underscores a notable stability in strata insurance premiums, which have seen a modest increase of 2.8% over the past year, rising from $954 to $981 per lot annually. This increment is significantly lower than the 14% surge observed in house insurance premiums during the same period. - read more
Insurance Council of Australia Advocates for Strata Law Reforms to Mitigate Rising Premiums in Victoria
Insurance Council of Australia Advocates for Strata Law Reforms to Mitigate Rising Premiums in Victoria
22 Apr 2026: Paige Estritori
The Insurance Council of Australia (ICA) has recently called for comprehensive reforms to Victoria's strata legislation, highlighting that inadequate governance and deferred maintenance are contributing to escalating insurance premiums for the state's strata property owners. This appeal underscores the pressing need for legislative updates to enhance the management and maintenance of strata-titled properties. - read more
Strengthening Small Business Resilience: ICA's Call for Insurance Reforms
Strengthening Small Business Resilience: ICA's Call for Insurance Reforms
22 Apr 2026: Paige Estritori
In a recent submission to the Parliamentary Joint Committee's inquiry into small business insurance, the Insurance Council of Australia (ICA) has highlighted the pressing need for reforms to enhance the resilience of Australia's 2.5 million small businesses. These enterprises, which employ nearly half of the private sector workforce, are facing mounting challenges due to escalating insurance premiums and evolving risks. - read more
Deloitte's Vision for the Future: 2026 Insurance Industry Predictions
Deloitte's Vision for the Future: 2026 Insurance Industry Predictions
22 Apr 2026: Paige Estritori
Deloitte has released its 'Growth in Insurance Series: Insurance Predictions 2026,' offering insights into the transformative trends expected to shape the Australian insurance industry. The report identifies eight key predictions that insurers should consider to remain competitive and responsive to the evolving market landscape. - read more


Life Insurance Articles

The Savvy Consumer’s Guide to Purchasing Life Insurance in Australia
The Savvy Consumer’s Guide to Purchasing Life Insurance in Australia
As the landscape of finance and personal security evolves in Australia, the importance of being insured has never been more prominent. In a world of changing family dynamics, economic pressures, and higher living costs, life insurance stands as a bastion of support ensuring the well-being of loved ones in the event of unforeseen circumstances. - read more
The Impact of Parenthood on Your Life Insurance Choices
The Impact of Parenthood on Your Life Insurance Choices
Life insurance, a contract between an insurer and a policyholder, is designed to provide financial protection to loved ones in the event of the policyholder's death. For parents, this protection takes on a new level of significance. The birth of a child heralds a profound shift in priorities, with a focus on safeguarding the future of one's family. Hence, understanding life insurance options becomes a crucial aspect of responsible parenting. - read more
A Millennial's Guide to Life Insurance
A Millennial's Guide to Life Insurance
For many millennials, navigating the complexities of personal finance and future planning can feel like a bewildering journey. Among these financial responsibilities, life insurance emerges as a paramount consideration. More than just a safety net, life insurance can be the cornerstone of a sound financial strategy, providing peace of mind for both the policyholder and their loved ones. - read more
The Digital Age of Insurance: Keeping Costs Down with Online Quotes
The Digital Age of Insurance: Keeping Costs Down with Online Quotes
The horizon of the insurance industry has undergone a transformative shift with the advent of digital technology. With a few clicks, consumers can navigate the once-complex world of insurance policies from the comfort of their home. The digital landscape for insurance services offers unprecedented access to information, comparisons, and instant communication, fostering a more empowered insurance client. - read more
Life Insurance Comparison: Key Questions to Ask Your Insurer
Life Insurance Comparison: Key Questions to Ask Your Insurer
Life insurance is a crucial consideration for middle-aged to older Australians. It provides financial security for your loved ones in the unfortunate event of your death. Understanding the various options available is vital to making an informed decision. - read more


Start Here !
life insurance
Apply now for your free Insurance assessment and price comparisons!

Start Here

Life Cover Amount:
Postcode:

All quotes are provided obligation-free by a participating broker from our national referral partner network. We respect your Privacy.


Knowledgebase
Depreciation:
The reduction in the value of an asset over time, used in insurance to calculate the actual cash value of property.