Hayne reforms ‘distracted insurers from claims management’
24 June 2022
Australian insurers have been urged to “prioritise” improving the claims management aspect of their operations, having spent the last few years focused on complying with reforms made by the Hayne royal commission.
Insurance consulting firm Xceedance says claims management has become even more important as the industry grapples with inflation and material shortages.
Australian Financial Complaints Authority (AFCA) data highlights the claims challenge facing the industry, with claim processing delays often the most frequent source of disputes with consumers.
Xceedance says by the end of last month the number of those complaints was already 88% higher than for all of last year.
VP and Country Manager Australia Stephen Browne says the massive burden of compliance and regulatory change that followed the Hayne royal commission has shifted insurers’ attention away from claims management.
The reforms required insurers to invest significantly to upgrade their compliance monitoring frameworks and also to train employees to understand the new regulations.
At the same time the industry has also had to familiarise itself with a new General Insurance Code of Practice that contains enhanced consumer protection measures such as support for vulnerable customers.
“There has been a plethora of changes,” Mr Browne says. “It’s no surprise these compliance activities have soaked up capacity for insurers, but the market is now ready for a shift in focus to better claims management.”
Mr Browne says innovation in claims management will help insurers improve the customer experience during claims processing and cut costs at the same time.
“It is possible to automate most elements of the claim lifecycle, from lodgement, liability assessment, and supply chain management through to payments, subrogation, recoveries, and settlement,” Mr Browne says.