AFCA data shows broker complaints have soared – but there’s a catch
Complaints to the industry ombudsman about general insurance brokers have almost doubled in number, according to the authority’s datacube, which counts disputes by product or company.
However, insuranceNEWS.com understands a significant number relate to contested add-on complaints that were lodged in bulk and may eventually be removed or reclassified.
The Australian Financial Complaints Authority’s datacube shows 788 broker complaints were received last financial year, up from 447 the previous year and 224 in 2022-23.
For context, total complaints received last financial year numbered 97,806, with general insurers accounting for 22,351 and underwriters/underwriting agencies 4310.
Even if all the broker complaints were valid, they still made up only 0.8% of the total.
According to the datacube, 453 of the 788 complaints were progressed, with 136 considered outside the rules, 57 discontinued and 116 resolved by agreement. Only 13 reached the decision stage and 56% of these were in favour of complainants.
| Related article: ASIC ‘respects AFCA independence’ over add-on deadine |
By business, Coverforce Insurance Broking received 385 complaints – almost half the total – followed by Marsh Advantage on 75 and Cover Genius with 70.
Coverforce told insuranceNEWS.com.au that from July 1 last year to August 31 this year it received 438 complaints, and 434 of them related to historical add-on insurance products “dating back 15 years in some cases”.
A spokesperson said: “These complaints were brought against Coverforce on a bulk basis by Claimo. However, Coverforce was not the entity which authorised the distribution of the relevant insurance products in question.
“AFCA has considered all relevant facts and decided that these add-on complaints fall outside of its jurisdiction on the basis that Coverforce was not the entity which provided the financial services alleged. Accordingly, these complaints have now been closed off.”
Despite this, the datacube still shows 385 Coverforce complaints received. Of those, only five are marked as discontinued and only seven as outside AFCA rules.
When asked to clarify the position, AFCA would say only that it “has communicated directly with the relevant parties and confirmed our position on jurisdiction”.
Search AFCA’s datacube here.