Check against delivery

I’d like to begin by acknowledging the Gadigal people of the Eora nation - by paying respects to Elders past and present, and I extend that respect to Aboriginal and Torres Strait Islander people in the room today.

It’s a pleasure to be here – and to follow on from the Assistant Treasurer [the Hon Dr Daniel Mulino MP, Assistant Treasurer and Minister for Financial Services], who of course takes a close interest in our work on general insurance.

Getting the basics right

When I first spoke at this event in 2024, the effects of the major floods of 2022 were still front of mind. The House of Representatives Standing Committee on Economics inquiry into insurers’ handling of claims arising from those events was coming to a close, and insurers were still working their way through a number of those claims.

Two years on, the industry faces a range of other forces – cost-of-living concerns for consumers, inflationary pressures on supply chains and increased cybersecurity threats, to name a few.

In this increasingly complex context, it is now more important than ever to focus on getting the basics right.

When life is complex, and consumers’ household budgets are under pressure, the financial products that they depend on for peace of mind need to work efficiently, honestly and fairly.

This is a theme that has underpinned ASIC’s work on general insurance across the past three years, as we have examined insurers’ pricing promises, claims handling and dispute resolution practices.

It’s a theme that has continued over this past year, as we have examined insurers’ approaches to cash settlements for home insurance claims and communication of motor vehicle insurance premiums (REP 838).

And it’s a theme that has been reinforced through recent enforcement action. Notably our commencement of proceedings against Auto & General for alleged policy discount misrepresentations^[1] and our action against Hollard, resulting in a civil penalty of $2 million, the first ordered against an insurer for breaching its duty of utmost good faith^[2].

Cash settlements

When a consumer is offered a cash settlement for a home insurance claim, getting the basics right means being able to understand what is being offered, how it was calculated, and their rights if they are not happy.

This is particularly important given the widespread use of cash settlements.

Around two-thirds [63%] of all claims we reviewed involved a cash component. For Cyclone Jasper, two of five insurers used them in more than 80% of claims.

But the evidence we gathered raised a number of concerns about the way in which they are being used. A key concern is that cash settlements may not always reflect the real cost of repairs.

When we looked specifically at claims relating to Cyclone Jasper, just over half [52%] of the cash settlement offers were based on a single quote, often from an insurer’s preferred supplier.

In one case, when a consumer went to the preferred builder who quoted on the work to see whether they would do the repairs for the quoted amount, they were told that the builder had undercut their costs by 40% for the insurer.

That consumer complained and the insurer increased the offer. But that, in itself, raises concerns about the fairness of some initial offers made by insurers.

We’re also concerned that some consumers aren’t being given enough information to make informed decisions – including about their ability to change their mind after accepting a cash settlement, where policies allow for this.

Motor vehicle insurance premiums

Turning now to motor vehicle insurance premiums.

When an insurer provides a premium quotation or renewal document, getting the basics right means providing clear information that can help a consumer to decide whether it seems fair or whether to shop around. That includes providing some information on the factors behind the quoted premium.

We were keen to review motor vehicle insurers’ practices in this area, given the steep price increases customers have experienced in recent years. In the 12 months to July 2025, premiums rose by 8% – outpacing inflation. This followed growth of more than 42% between 2019 and 2024.

Perhaps not surprisingly, this has been accompanied by a rise in complaints, with motor vehicle insurance the most complained-about product in the internal dispute resolution data, and premiums being the most common reason for complaint.

Despite the clear importance of price to consumers, none of the insurers in ASIC’s review explained the key factors that affected how premiums were calculated in their quote and renewal documents. Nor why they had changed from year to year.

Insurers who charged more for paying by instalments, rather than annually, did not highlight the additional cost in renewal notices.

And five of the insurers in our review did not provide a clear year-on-year comparison of changes to insured value or excess – factors that it is clearly important to understand when assessing a change in price.

This is an area where there is a clear opportunity to do more to get the basics right.

Claims management firms

As we look ahead, everybody in this room will be conscious that we are approaching the season when Australia is particularly exposed to disasters that can lead to more insurance claims.

Unfortunately, this is also a time when so-called ‘disaster chasers’ – a subset of third-party claims managers that target consumers affected by severe weather events – gear up their operations.

With this in mind – and following representations from the ICA and consumer groups – ASIC has commenced a review into the practices of licensed for-profit third-party claims managers in the home insurance space.

We will consider these firms’ sales and client acquisition practices, fee and cancellation arrangements, their role in claims and complaints handling, and commercial relationships with repairers and other suppliers.

We will also examine what distinguishes legitimate claims management services from practices that create or increase risks of consumer harm.

We have already engaged with a range of insurers to inform this review and we look forward to engaging further as this work progresses.

General Insurance Code of Practice

The other key area of work for ASIC in the coming months will of course be our review of the draft revised General Insurance Code of Practice, which was submitted on 22 October.

We acknowledge the significant amount of work that has gone into the development of the revised Code, including through the final stage of consultation led by the ICA over recent months.

I’m pleased to announce that next week ASIC will commence seeking the views of stakeholders on the revised draft. This will involve direct engagement with key stakeholders, as well as inviting written comments.

This will inform further discussions with the ICA about any changes that may be required before a final Code is submitted for formal consideration, which can hopefully occur early in 2027.

This work is a priority for ASIC because we see the Code as an important foundation to my core message today – that in general insurance, getting the basics right is now more important than ever.

Conclusion

Thank you for the opportunity to share these opening remarks. I’m now very pleased to hand over to my peer regulator, Suzanne Smith from APRA.

 

^[1] 26-036MR ASIC sues Auto & General alleging policy discount misrepresentations made to millions of consumers in Budget Direct insurance ads | ASIC

^[2] 26-236MR Hollard fined $2 million for serious insurance claim delay | ASIC