Veronique Ingram

The General Insurance Code Governance Committee (CGC) has called on insurers to enhance their practices after its follow-up inquiry revealed concerns regarding the oversight of external experts used in claims assessments.

The CGC’s report, Oversight of External Experts, is a follow-up to its 2022 report which revealed concerns with the quality of many of the expert reports that insurers relied on to make decisions on claims.

Among a range of concerns, Oversight of External Experts highlights instances where external experts provided opinions beyond their areas of expertise, potentially leading to poor claims decisions.

Chair of the CGC, Ms Veronique Ingram, stressed that it was important for insurers to limit the opinions of external experts to their fields of expertise.

“External experts play a crucial role, but it is critical that their views on a claim don’t go beyond their field of expertise,” Ms Ingram said. “Insurers should take steps to ensure this. It will help enhance the quality of claims assessments and will work to protect the integrity of the process.”

The report also identified gaps in the training programs provided to external experts by insurers. The CGC recommends that insurers improve their programs to ensure that external experts fully understand their roles and responsibilities. The CGC also emphasised the need for continuous education beyond initial training.

“Effective training is the foundation of reliable claims assessments,” Ms Ingram added. “Insurers have a responsibility to ensure that their external experts receive comprehensive training and ongoing education to maintain high standards of service.”

Additionally, the report noted that insurers’ quality assurance processes too often prioritised cost and time efficiency over the quality of work performed by external experts. The CGC has recommended improvements to insurers’ monitoring processes that strike a better balance between quality, cost, and time efficiency.

“While efficiency is important, it should not come at the expense of quality,” Ms Ingram stated. “We expect that insurers’ quality assurance processes are comprehensive and incentivise work of the highest standards from external experts.”

The CGC remains committed to working with insurers to drive improvements in the industry, ensuring that claims assessments are conducted accurately and with integrity. It was pleased to see the Insurance Council of Australia (ICA), the industry peak body, recently publish updated guidance and written standards that encourage better practices when using external experts.

“The new guidance and standards from the ICA demonstrate a real push for better use of external experts in the industry,” Ms Ingram said. “When insurers read these publications in combination with the recommendations in our report, they will have a clear view of the expectations for use of external experts.”

The CGC will continue to monitor the performance of insurers in this area of claims-handling, looking at how insurers will implement the recommendations from its report.

Read Oversight of External Experts.

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Veronique Ingram

The General Insurance Code Governance Committee’s (CGC) Annual Report highlights its ongoing efforts to improve industry compliance and accountability.

The report, released last week, details how the CGC’s recent inquiry uncovered the high over-turn rate of claims initially denied on grounds of wear and tear following complaints customers. This underscores its pivotal role in driving systemic improvements.

The CGC put forth a series of recommendations that will benefit both consumers and industry stakeholders.

CGC Chair, Veronique Ingram, commented on the report, “Our work continues to serve as a catalyst for positive change within the industry. We are dedicated to improving overall industry practices and ensuring fair treatment for consumers.”

Delays in reporting significant breaches continue to concern the CGC.

A number of subscribers failed to report breaches in a timely manner, leading to potential risks for both consumers and the industry.

Ms. Ingram reminded subscribers of the importance of quality reporting.

“Timely and accurate reporting of breaches is paramount to safeguarding both consumers and the integrity of the industry,” she said.

The report also highlights the coming challenges facing the general insurance industry, given the expected increase in frequency of natural disasters.

Ms. Ingram advised subscribers to consider volatile claims volumes as the ‘new normal’ and prepare for anticipated weather events accordingly.

“In times of increasing crises, it is imperative that the insurance industry adapts to keep consumers at the forefront of its efforts. We will not accept subscribers using the same excuses in relation to poor handling of claims and complaints due to increased volumes.

“We will be monitoring the implementation and effectiveness of remedial actions and taking further action where necessary to prevent consumer harm,” Ms. Ingram said.

Read the report.

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