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Problems with insurance companies’ claims-handling, risks for investors from the boom in private markets and use of artificial intelligence by the financial sector will be among focus areas for the corporate watchdog over the coming year and beyond.
Amid a surge in premiums for car and home insurances and high numbers of customer complaints, the Australian Securities and Investments Commission (ASIC) has vowed to scrutinise the sector in its new corporate plan.
East coast flooding in 2022, including in Lismore, NSW, was the most expensive insurance event in the nation’s history.Credit: Elise Derwin
The plan provides new details on how ASIC will direct its strategic priorities, saying that “acting against insurance misconduct” will be a focus area.
“We will take action against insurers in relation to claims handling, especially in relation to home insurance claims,” ASIC says in the plan, to be released on Thursday.
Insurance companies have faced parliamentary inquiries in recent years after 2022’s east coast floods sparked a wave of complaints from customers and the industry scrambled to deal with the most expensive insurance event in the nation’s history.
The Australian Financial Complaints Authority this month said complaints about general insurance were at a record high, increasing 4 per cent in the year to June, following a 50 per cent surge in the previous year. Insurers have acknowledged failures in their systems, processes and resources, vowing to improve. ASIC said it was also looking at insurers’ commitments to improve claims handling.
The ASIC plan, launched by its chair, Joe Longo, also reiterated the watchdog’s focus on the rapid growth in private markets as more investors chased the higher returns of debt or shares not listed on public exchanges.
ASIC said it would launch a review into the growth in private markets and implications for the efficiency and integrity of the public markets. Private credit funds allow investors to lend to companies that would struggle to borrow from a bank – offering investors higher yields, but raising questions about risk and transparency.
Longo noted ASIC’s corporate plan included a new strategic priority – driving consistency and transparency across markets and products.