The General Insurance Code Governance Committee has released its annual report, arguing its activities this year have driven improvements across the sector.

Here we examine five key points from the report.

Breaches are down

The committee collected and analysed 67,394 reports of code breaches in FY24. These figures, which were already reported in a data and compliance report earlier in the year, mark a 13% reduction from the prior year.

This is a welcome shift after three years of sharply rising breaches – however, there was an 18% rise in complaints, indicating there’s no room for complacency.

The committee also received and reviewed 114 significant breach reports from 22 insurers, and undertook 14 significant breach remediation audits.

As a result, insurers handed out almost $3 million in remediation payments, and 369 apology letters were sent to customers.

Enforcement  

The committee made use of its beefed-up sanction powers this year, imposing a $100,000 community benefit payment on an unnamed insurer in January, and a $30,000 payment on AIG Australia in June.

“These insurers have since strengthened internal controls, improved training and committed additional resources to ensure better outcomes for customers,” the annual report notes.

There was some backlash over the decision not to name one of the sanctioned insurers, and in October the committee updated its compliance and enforcement approach.

“Unless there is a compelling reason not to, we will publicly name the insurer and require it to publicly acknowledge the significant breach,” the approach document says. 

“We recognise the importance of holding insurers accountable when serious failures occur to maintain trust and confidence in the industry.”

Reports

The committee says its monitoring and inquiry work continues to “deliver meaningful outcomes”, highlighting its review of insurers’ use of expert reports.

A report published in August last year identified “serious gaps” in how some insurers oversee external experts, but the committee says it was “a catalyst for action”, with the Insurance Council of Australia publishing best practice guidance.

The committee this year carried out a further review, which found insurers had taken positive steps “including changing how experts reports are used, strengthening training programs and improving accountability within claims teams”.

Insurers’ implementation of improvements will be monitored.

Also this year, the committee reviewed the relevance of questions insurers ask applicants for motor insurance.

“This work identified that some insurers are collecting information beyond what is relevant to the underwriting decision, and highlighted opportunities to improve the transparency and clarity of underwriting decisions.”

In 2025-26 the committee will conduct a follow-up assessment.

“If we find a lack of meaningful progress on recommendations, we will consider further enforcement measures,” the annual report says.

Priorities for next year  

The committee sets monitoring priorities for the year to come, to focus on the “areas of greatest opportunity to improve industry practices and outcomes for customers”.

The priorities are shaped by breach data analysis and insights gathered through consultation with industry, consumer advocates and regulators.

The three focus areas for 2025-26 are:

• Complaints handling – the committee will review an aspect of complaints handling, with the goal of improving internal processes and customer outcomes.
• Pricing transparency – the committee will assess how clearly insurers explain premium increases to customers and how this affects fairness and trust.
• Identification and treatment of customers experiencing vulnerability – weighing recommendations from the code review and flood inquiry, the committee will consider how best to support implementation under the revised code.

Preparing for a new code

The committee says it welcomes ICA’s commitment to enhance the code by making it enforceable and seeking approval from the corporate regulator.

“These are important steps that will continue to build trust and confidence in the self-regulatory model that the industry developed.”

But it says it will continue to push for improvements in several areas:

• Claims handling – stronger commitments for timeliness, communication, cash settlements, temporary accommodation and oversight of external experts.  
• Customers experiencing vulnerability – better processes to identify vulnerability and stronger expectations for the training and capability of specialist teams.
• Financial hardship support – expanded scope of commitments for payment assistance to support more customers in need.

“Although implementation of the new code has been delayed until July 1 2027, the year ahead will involve the bulk of preparation work,” the report says.

“Our focus will be on supporting a smooth transition and ensuring insurers and their customers are well placed to benefit from the new and strengthened commitments.”

See the full annual report here.

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