Home insurers need to improve their oversight of independent experts, and provide better information to consumers when offering cash settlements.
These were some of ASIC's findings from a recent review, which assessed how general insurers had addressed areas for improvement identified in Report 768 Navigating the storm: ASIC's review of home insurance claims, released in August 2023.
ASIC Commissioner Alan Kirkland said: 'Following the major floods of 2022, home insurers have told us that they have improved their approach to claims handling, but they still have more work to do in responding to our concerns.
'Oversight of builders and repairers has improved since our last report, but there are still gaps in oversight of independent experts - the external advisers who provide the expert reports insurers rely on to make claim decisions.'
ASIC found that insurers did not have a systemic approach to overseeing the quality of independent expert reports and generally relied on claims-handling staff, who may not have the required level of subject matter 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.
Mr Kirkland also said that consumers need to be better informed about how cash settlements may work and how decisions are made.
'Insurers by law must provide a cash settlement fact sheet, which outlines options for settlement to customers who have made a claim. Those options should be explained in terms the customer can understand, rather than pointing to complex product disclosure statements,' he said.
ASIC observed that many cash settlement fact sheets gave customers the minimum information on the right to have a cash settlement reviewed, and few clearly outlined what the review process was, or when the right to review expired. This means consumers may not have all the information they need to make an informed decision about a cash settlement.
'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,' Mr Kirkland said.
As part of the review, ASIC also noted continued issues around resourcing, customer communications, identification of vulnerable customers, claims handling improvement programs and audits.
More information about ASIC's follow-up review of the home insurance industry is detailed in: Home insurance claims handling improvements can still go further.
Background
Between August 2024 and April 2025, ASIC reviewed the action plans of seven insurers, six that participated in Report 768 Navigating the storm: ASIC's review of home insurance claims (REP 768), and an additional insurer. They included:
- AAI Limited (Suncorp) (including AAMI, APIA, GIO, Shannons, Suncorp and Vero)
- Allianz Australia Insurance Limited (including Allianz and TIO)
- Auto & General Insurance Company Ltd (including Budget Direct, ING and Virgin)
- The Hollard Insurance Company Pty Ltd and Hollard Insurance Partners Limited
- Insurance Australia Group, which includes Insurance Australia Limited and Insurance Manufacturers of Australia Pty Limited (including CGU, Coles, NRMA, CGIC, CGIO, WFI and RACV)
- QBE Insurance (Australia) Limited, (including QBE, ANZ and Elders) and
- Youi Pty Ltd.
More information
Consumer education on home insurance, including how to make a claim, can be found on ASIC's Moneysmart website.
ASIC is Australia's corporate, markets and financial services regulator.
