Of the more than 4.7 million complaints reported by financial firms of all types for the year to 30 June 2024 just under 55,000 related to life insurance, ASIC’s first publication of industry-wide data reported under the internal dispute resolution data reporting framework reveals.
ASIC explains that under the IDR framework, most licensed financial firms are required to report IDR data to ASIC on a six-monthly basis. It says this inaugural industry-wide report “…is a key milestone in the implementation of the framework.”
General insurance products were subject to the most complaints (33% of all complaints), followed by credit products (22%) and deposit-taking products (15%)
Looking specifically at life insurance ASIC’s report says in the 2023–24 financial year, financial firms reported 54,896 complaints relating to life insurance products.
“More than 51% of complaints were resolved on the same day. More than $11 million in total monetary remedy was provided to life insurance complainants.”
The report says the top three products for life insurance complaints were:
- Term life (41%)
- Income protection (22%)
- Funeral insurance/funeral plans (11%)
The top three issues for life insurance complaints were:
- Service-related issues (29%)
- General service delay (13%)
- Premiums (10%)
The report also notes the top three outcomes for life insurance complaints were:
- No remedy, or apology or explanation only (45%)
- Service-based remedy (37%)
- Monetary remedy (8%)
It says that half of the reported life insurance complaints were resolved on the same day, while three-quarters of the complaints were resolved within eight days. Almost all complaints (99%) were resolved within 39 days.
… ASIC is concerned that some firms are not reporting IDR data as accurately as is possible…
In its statement regarding the data, ASIC says while it does not verify that financial firms’ self-reported data accurately reflects their underlying complaints handling “…we found variations in the volume of complaints reported by comparable firms and gaps in the IDR data that indicate the data reported to ASIC may not fully reflect the complaints received by some firms. As a result, ASIC is concerned that some firms are not reporting IDR data as accurately as is possible.”
It adds that 5,035 firms declared no complaints to report for the full year period. “This number is higher than ASIC expected.”
The commission says it will assess compliance with the reporting requirements “…by reviewing firms that make a nil submission against other datasets, including reports of misconduct, reportable situations and data from the Australian Financial Complaints Authority.”
ASIC Commissioner Alan Kirkland says it’s important for firms to foster a positive complaints management culture, including a focus on gathering accurate data.
He says the gaps ASIC has identified suggest there may be inconsistent IDR reporting practices across the industry.
…Starting from next year, we’ll be publishing data about complaints received by individual firms…
“While there may be reasonable explanations for some of these variances, we encourage firms to carefully review our report and guidance to assist in reporting complete and accurate IDR data. Starting from next year, we’ll be publishing data about complaints received by individual firms. It is crucial that firms act now to address any gaps in IDR reporting processes, because we will publish the data as it is reported to us.”
Kirkland said ASIC is closely examining the standard of IDR reporting and undertaking a range of activities to strengthen compliance with the regime.
Click here to see the full report.
