Insurance claim rejection and claim handling delays were leading causes of financial services complaints in the year to June, and car cover was second on the list of products most complained about.

A record 119,949 complaints were lodged overall, Australian Financial Complaints Authority annual data shows.

General insurance complaints numbers grew 5% to 36,022, and life insurance complaints rose 3% to 1561.

It was the third consecutive year that complaints topped 100,000, and numbers increased across all areas.

AFCA chief customer officer Deborah Jenkins says while 43% of general insurance complaints were resolved before formal decision-making, numbers remain persistently high.

She says there is an opportunity to reduce the load, with car insurance causing many disputes and claim rejection complaints up 47% in fiscal 2026.

Rejection of superannuation insurance claims was another frequent issue, rising 82%.

“Consumers are struggling. By working with us and acting on these insights, firms can help prevent recurring issues,” Ms Jenkins said.

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“These numbers point to opportunities for firms to strengthen hardship support, improve communication with customers ... helping resolve issues before they become disputes.”

The three most complained about financial products were personal transaction accounts, motor insurance and credit cards.

The top three issues were delay in claim handling, service quality and claim rejection.

AFCA reports a 56% rise in complaints about investments and advice to 6542, driven by the collapse of Shield Master Fund and First Guardian; a 42% rise in superannuation complaints to 8755; and a 23% rise in banking and finance complaints to 66,971. Scam complaints were up 12% to 6706.

Financial difficulty complaints numbers were up 17%, and those for credit reporting grew 22% after a “a steep rise” in recent months.

“These numbers highlight the impact that ongoing cost-of-living challenges and economic uncertainty are having on consumers,” Ms Jenkins said. “Complaint data is one of the clearest signals firms have about what’s going wrong for their customers. Firms that use those insights to improve are more likely to prevent the same problems happening again.”

Full data will be available later this year.