Key points
- The insurance industry has an enormous task ahead to rebuild trust with the Australian community following a challenging period of claims handling failures.
- The development of a new General Insurance Code of Practice that will be enforceable by contract is an important step towards rebuilding trust. However, unless the provisions themselves improve overall levels of consumer protection, it will be a step backwards.
- Our challenge to industry over the next year is to commit to a code that will make a real difference to your customers. Simple cannot be code for stripped out.
Acknowledgement of country
I would like to begin by acknowledging the Traditional Owners, the Gadigal people of the Eora Nation, and their ongoing connection to and custodianship of the lands on which we meet today. I pay my respects to elders past and present and I extend that respect to Aboriginal and Torres Strait Islander people here today.
Introduction
It is a pleasure to speak at this conference again, and to continue the tradition of ASIC and APRA appearing together. I know that we both view this an important forum for ensuring the insurance sector is ready for the challenges both at hand and ahead.
I want to acknowledge the efforts of Andrew Hall, Steve Johnston, and the ICA Board for your work in leading the industry through these challenges.
As a few examples, I was really pleased to see your recent report on artificial intelligence[1]with the CSIRO and its focus on ensuring the adoption of AI in insurance does not lead to adverse outcomes or erode consumer trust.
I was also particularly pleased to be informed of the decision that your new General Insurance Code of Practice will be enforceable by contract. This is an important step from a consumer protection perspective. After all, insurance is a promise – and promises have to mean something. That’s a point I will return to later in my remarks, but I wanted to congratulate you on your leadership here.
I note the last code review occurred during the Hayne royal commission, which some of you probably remember that former Insurance Council chief executive, Rob Whelan, referred to as “trying to pitch a tent in the middle of a hurricane”[2] .
Six years on, and this analogy is probably still an apt one to describe the broader risk to the industry. While perhaps that particular hurricane has moved on, it does feel like there is always another storm either upon us, or upon the horizon.
For example, climate change is no longer just a risk to insurers – it's a risk to insurance itself.
The National Adaption Plan[3] released last month by the Australian Government laid bare the vulnerabilities of the insurance sector and the financial system more broadly to be honest to climate change.
It has even been speculated by some that climate change could be the catalyst for the next financial crisis[4].
In the past five years alone, there have been nearly one million insurance claims and more than $20 billion in insured losses in Australia[5].
And in the next five years, the Climate Council projects that one in 25 Australian homes will be uninsurable due to the effects of climate change[6].
Even ex-Tropical Cyclone Alfred – which fortunately defied the catastrophic forecasts[7] that we were all looking at – resulted in more than $1.4 billion in claims – the seventh most costly cyclone-related disaster on record in Australia[8].
These are big numbers with big implications. They impact every Australian household through rising premiums. They impact every Australian seeking timely support from their insurer by increasing pressure on claims handling. But they also impact how Australians view the insurance sector more broadly.
It’s hard to forget those who let you down when you’ve had a hard time – and that was unfortunately the experience of many Australians in the aftermath of the 2022 floods.
“Some people, who turned to their insurer in their darkest hour after paying premiums for years, felt that they became engaged in an adversarial situation with a company meant to be on their side."[9]
That quote is from the House of Representatives Standing Committee on Economics report into claims handling failures after the 2022 floods, which was handed down almost a year ago.
It’s fair to say that there remains a significant trust gap to be addressed following this report.
Reputation data from RepTrak[10] and Roy Morgan[11] suggests that insurance is among Australia’s most distrusted industries – and you only need to look at the testimony of individuals impacted to understand why.
David Norris, whose family owned the Central Hotel in Eugowra, told the inquiry after more than 60 years with their insurer it was apparent that “loyalty only goes one way[12].
This is the challenge that must be addressed by you as you try to “pitch your tent” in the middle of these storms – showing people like David that loyalty is a two-way street.
Green shoots of recovery
As insurers though, you are in the business of recovery. You know that rebuilding doesn’t happen overnight. It takes continual effort and care. And we know from our latest review that some of you are putting in the work and starting to see some green shoots of recovery as a result of that work.
As noted recently by AFCA[13], the industry has made progress on reducing historically high complaint numbers, which should be commended.
And we have also observed some promising signs in our recent follow-up on Report 768 – which of course was the report that examined claims handling practices following the 2022 floods[14].
When that report was published, we found that poor communications, poor resourcing, and poor treatment of vulnerable customers were endemic across the insurance industry.
But it is clear that a lot of work has happened in the past two years in response to those findings.
For example, every insurer we looked at this time around had established a program to improve their approach to claims handling.
Most had introduced a single point of contact for claims, so customers didn't have to tell their stories over and over again.
Some had gotten smarter about how they used their data to identify and support vulnerable customers, before and after major events.
And a few went beyond this – towards truly consumer-centric practices.
For example, we’ve seen some insurers appoint a dedicated consumer advocate to be a voice for customers inside their company.
Some have established specialist new teams dedicated to the handling of vulnerable consumers, sometimes with the help of external experts, to plug gaps before people fall through them.
I’ve called out these two practices in particular because it is important to walk in your customers’ shoes when improving claims handling practices in order to learn where the real stumbling blocks are.
There is clearly more work to do. Progress is still too slow on some measures, and uneven on others. But the process of change has begun, and we want you to continue that momentum.
Where to next
And to help you focus your efforts, I'd like to talk about two projects ASIC will undertake within the next year.
The first will examine the accuracy and transparency of premiums – in particular car insurance premiums.
That’s because this area is a clear pain point for your customers. According to ASIC’s internal dispute resolution data that you provide to us, motor vehicle insurance is the most complained about general insurance product – and premiums are the biggest category of complaint.
And as our recently commenced enforcement action against RACQ shows[15], we are particularly concerned where insurers don’t make it easy for their customers to even understand how much their premium has changed from year to year.
ASIC can't set insurance premiums, but we can hold insurers accountable for their pricing practices and the accuracy of their communications with their customers.
Our review will examine how insurers communicate premiums, to understand whether they are complying with their legal disclosure requirements. We will also engage with consumers to understand the challenges they face when they buy or renew car insurance.
The other key area of focus for us is the use of cash settlements, which has already come up this morning.
The floods inquiry brought into sharp focus the challenges consumers can face when offered cash settlements.
Often inadequate settlements have left Australians holding the bag during what is a time of increased vulnerability for them[16].
Some individuals have only accepted these settlements because they don’t have the energy or the means to fight any longer.
To quote ARC Justice Chief Executive, Damien Stock, who gave evidence to the parliamentary inquiry:
“We've heard some horrible stories of children not wanting to get up in the morning because the warmest part of the shed that they're living in is their bed and they don't want to get out of their bed and be in the cold shed. Now, I am a parent. If I was a parent in those circumstances—fighting an insurance company over 12 months—and I was offered cash to stop my child feeling like that, I'd take cash.”[17]
So, the focus of our work this year will be to investigate the practices and disclosures surrounding these offers to better understand the risks to consumers during these periods of heightened vulnerability.
Conclusion – commit to the code
So, that’s what you can expect from us over the next year – but for my final minute on the stage, I would like to talk about what we expect from you.
I said before that insurance is a promise. But promises without accountability are essentially empty commitments.
Think about people like David, who has lost all faith in his insurer after 60 years of loyalty from his family. It will take a lot more than words to restore his trust in insurance after what he has experienced. It will take teeth - specifically, teeth in your new code.
As I said earlier, it is a commendable step to make the general insurance code enforceable by contract. But if the provisions themselves do not improve overall levels of consumer protection, it will be a step backwards.
We often say at ASIC that simplicity equals enforceability, but at the same time, simple cannot be code for stripped out.
So my challenge to you over the next year is to get this new code right and to make it count. Commit to a code that will make a real difference to your customers.
Like the communities that you support, the insurance sector has shown remarkable resilience and capacity for rebuilding. But as the storms continue to swirl around us, it is critical that you build back better – and a meaningful code is the path towards this.
Thanks for the opportunity to speak today.
[1] AI for better insurance - CSIRO
[2] 'Pitching a tent in a hurricane': code revamp nears sign-off - Insurance News - insuranceNEWS.com.au
[3] National Adaptation Plan - DCCEEW
[4] How the next financial crisis starts
[5] Australia’s Insurance Industry Snapshot 2025 – Insurance Council of Australia
[6] Uninsurable Nation: Australia’s most climate-vulnerable places | Climate Council
[7] From storm to study: Insights on resilience from Tropical Cyclone Alfred | Natural Hazards Research Australia
[8] ICA-Historical-Normalised-Catastrophe-Master-Updated-July-2025-1.xlsx
[9] Flood failure to future fairness – Parliament of Australia
[10] Quarterly data from 2021-2025 from RepTrak shows approximately one-third of Australians feel the insurance industry has a bad reputation.
[11] Which brands do Australians trust — and which do they distrust? - YouTube
[12] ParlInfo - Standing Committee on Economics : 08/05/2024 : Inquiry into insurersâ responses to 2022 major floods claims; and
[13] AFCA receives more than 100,000 financial complaints in 2024-25 | Australian Financial Complaints Authority (AFCA)
[14] Home insurance claims handling improvements need to go further, ASIC says | ASIC
[15] 25-211MR ASIC takes court action alleging RACQ sent half a million misleading insurance renewal comparisons | ASIC
[16] Flood failure to future fairness
[17] ParlInfo - Standing Committee on Economics : 01/02/2024 : Inquiry into insurersâ responses to 2022 major floods claims
