Annual Review 2022–23
Contents
- About this Annual Review
- Year at a glance
- Acknowledgement of country
- Board Chair message
- Chief Executive Officer and Chief Ombudsman message
- Organisational overview
- AFCA Independent Review
- Complaints
- Who complained to AFCA?
- Overview of complaints
- Open cases
- Closed cases
- Banking and finance complaints
- Buy now pay later
- Scam complaints
- Financial difficulty complaints
- Small business complaints
- General insurance complaints
- Significant events
- Life insurance complaints
- Superannuation complaints
- Investments and advice complaints
- Cryptocurrency
- Complaints lodged by Aboriginal and Torres Strait Islander peoples
- Complaints lodged by consumer advocates and financial counsellors
- Complaints lodged by paid representatives
- Complaints outside AFCA’s Rules
- AFCA’s Systemic Issues function
- AFCA’s Code compliance and monitoring functiong
- Engagement, awareness and accessibility
- Corporate information
- AFCA General Purpose Financial Report
- Glossary
About significant events
AFCA has a response plan that we activate for significant events (e.g. natural disasters, severe weather) that are likely to lead to a large number of related complaints.
This plan provides for early communication with relevant stakeholders and a more streamlined, faster process for resolving related complaints.
To ensure we’re appropriately handling these disputes, AFCA regularly engages with industry partners including ASIC, the Federal Treasury and APRA, as well as industry representative groups such as the Insurance Council of Australia (ICA).
As the climate continues to change, both in Australia and around the world, natural disasters such as floods and bushfires will become more common. In the last year alone, millions of Australians were affected by catastrophic events. These events not only destroyed homes, schools, businesses and critical infrastructure, but severely impacted hundreds of families and their communities.
AFCA often sees financial complaints after natural disasters. We track these complaints to share data and insights with our stakeholders. However, we know that behind each complaint is a person or family recovering from tragedy. To support complainants in vulnerable circumstances, we have special processes in place.
Over this financial year, AFCA responded swiftly to four significant events to help those in need. These included the following storm and flood events that affected:
- NSW in July 2022
- Victoria, NSW and Tasmania in October 2022
- Central West NSW in November 2022.
AFCA was also prepared to respond to the Newcastle hailstorm in May 2023. However, as at 30 June 2023, we had not received a complaint.
We kept oversight on the complaints resulting from the severe weather and flooding in South East Queensland and NSW in February 2022, which had been declared a ‘significant event’ by the ICA.
NSW Storms and Floods July 2022
As at 30 June 2023
Top five issues in complaints
|
Issue |
Total |
|---|---|
|
Denial of claim – exclusion/condition |
85 |
|
Delay in claim handling |
59 |
|
Claim amount |
48 |
|
Denial of claim |
20 |
|
Service quality |
7 |
Most complaints arising from the NSW storms and floods in July 2022, were about the denial of a claim due to an exclusion or condition (85 or 42%). For this event we received 201 complaints and resolved 146. Only one related to financial difficulty.
VIC, NSW and TAS Storms and Floods October 2022
As at 30 June 2023
Top five issues in complaints
|
Issue |
Total |
|---|---|
|
Denial of claim – exclusion/condition |
70 |
|
Delay in claim handling |
55 |
|
Claim amount |
47 |
|
Denial of claim |
35 |
|
Service quality |
7 |
AFCA received 211 complaints arising from the storms and floods affecting Victoria, New South Wales and Tasmania in October 2022, and we resolved 123. Only one related to financial hardship. The main issue raised was the denial of claims due to an exclusion or condition (70 or 33%).
Central West NSW Storms and Floods November 2022
As at 30 June 2023
Top five issues in complaints
|
Issue |
Total |
|---|---|
|
Denial of claim – exclusion/condition |
3 |
|
Claim amount |
2 |
|
Delay in claim handling |
1 |
|
Denial of claim |
1 |
|
NA |
NA |
In November 2022, the Central West of NSW was affected by severe storms and floods. AFCA received six related complaints and resolved one. No complaints were associated with financial hardship. The main cause of complaint was denial of a claim due to an exclusion or condition (3 or 45%).
South East QLD and NSW Severe Weather and Flooding February 2022
As at June 2023
Top five issues in complaints (since being declared in February 2022)
|
Issue |
Total |
|---|---|
|
Delay in claim handling |
858 |
|
Denial of claim – exclusion/condition |
821 |
|
Claim amount |
680 |
|
Denial of claim |
164 |
|
Service quality |
141 |
AFCA received 2,468 complaints and resolved 1,997 following the severe weather and flooding event that struck South East Queensland and NSW in February 2022. Only 18 complaints related to financial hardship. Delay in claim handling and the denial of a claim due to an exclusion or condition accounted for 858 (35%) and 821 (33%), respectively.
Case study
Background
The complainants lodged a home and contents claim after a severe weather event. The insurer declined part of the claim as it said it was caused by flood, which was excluded under the policy. The complainants said that all the internal damage was caused by stormwater entering the home before the floodwater entered the home. The complainants had cover for storm, rainwater or run-off.
Findings and outcome
The panel reviewed the available evidence including the insurer’s hydrologist report, and also eyewitness reports and photos provided by the complainants. On consideration of the evidence, the panel found that the hydrologist report did not state the time of the initial inundation, or its cause, and concluded that the insurer had not shown the disputed damage was first caused by flood water. The panel found that the damage was, on balance, sustained due to stormwater ingress before the home was affected by flood. The insurer had not established that the flood exclusion applied and, therefore, it must accept the disputed damage claim.
