We have synthesised notable findings, as well as recommendations, from the IBCCC’s report.  You can access the full report here.

Breaches

1. Increasing Volume and Complexity of Breaches

• Reported breaches increased by 36%, from 3,405 in 2022 to 4,642 in 2023. This indicates an ongoing challenge for brokers in managing compliance with the Insurance Brokers Code of Practice (the “Code”).
• Policy Renewal Breaches: 1,535 breaches (33.1%) were related to the failure to contact clients at least 14 days before their insurance cover expired. This was the largest breach category.
• Communication Failures: 775 breaches (16.7%) involved not communicating clearly and in a timely manner with clients.
• Breaches related to disclosing remuneration jumped almost five-fold, from 23 to 106, affecting over 8,000 clients.
• Systemic breaches rose by 74% to 270 breaches, signalling deeper operational or process issues that impact multiple clients.

2. High Financial and Client Impact

The financial impact of breaches rose sharply, reaching $9.4 million – triple that of 2022. In 2023 794,000 clients were impacted, double the previous year.

3. Root Causes of Breaches

• Human Error remains the predominant cause, responsible for 74.1% of breaches, often due to staff failing to follow procedures or manual data entry errors
• Failures to follow or implement correct procedures accounted for a significant portion of breaches, particularly around policy renewal and communication.

4. Data Quality and Reporting Issues

• A large portion of brokers continue to submit incomplete, inaccurate, or inconsistent compliance data.
• Over 100 brokers missed reporting deadlines.

5. Breach Remediation and Root Cause Analysis

• The report highlights the need for both short- and long-term remediation. Many brokers lack robust systems for identifying root causes and addressing recurring breaches.
• 1% of breaches did not include long-term remediation.

Complaints

1. Slight uptick in complaints

• 66% of insurance brokers reported complaints in 2023, up from 61% in 2022.
• The total number of complaints increased, with notable concerns over delay in claim handling and general service delays (see below).

2. Top Complaints Issues

• Delay in Claim Handling (14.5% of total complaints): This issue saw 382 complaints, down slightly from 406 in 2022, but it remained the most significant complaint issue.
• General Service Delays (13.5%): These include slow response times and long waiting periods.
• Premium Issues (8.5%): Complaints about excessive or incorrect insurance premiums also grew in 2023.
• Denial of Claims (6.1%): Many complaints were related to claims being denied due to exclusions or conditions within the policies.

3. Complaints by Product

The most common complaints sources were Small Business/Farm Insurance (12.1% of complaints), Residential Strata Title (12.1%) and Home Building Insurance (9.7%).

Recommendations

The report provides numerous recommendations to improve compliance and complaints management.

1. Overall compliance

• Strengthen Processes: Regularly review and enhance internal systems, especially around policy renewals and communications, to ensure adherence to the Code.
• Data Quality: Improve the accuracy, consistency, and timeliness of data submissions, and invest in robust data governance frameworks.
• Ongoing Training: Ensure continuous staff training focused on reducing human error and improving awareness of Code obligations.

2. Breach Management

• Root Cause Focus: Address the root causes of breaches, with a focus on long-term remediation such as process improvements to prevent recurrence.
• Prevent Systemic Breaches: Identify and resolve underlying systemic issues that affect multiple clients.
• Effective Remediation: Use both short-term actions (e.g., apologies) and long-term solutions (e.g., improved processes) for breach resolution.

3. Incident & Complaint Handling

• Timely Communication: Prioritize clear and timely communication, especially for policy renewals and claims, to avoid coverage lapses and complaints.
• Learning from Complaints: Use client complaints as a tool for identifying breaches and improving services.
• Better Complaint Systems: Develop efficient internal complaint-handling systems, with a focus on quick resolution and data-driven improvements.

4. Data & Reporting

• Timely Submissions: Submit compliance data on time, ensuring completeness and accuracy to avoid penalties and inefficiencies.
• Leverage Technology: Invest in technology to automate data collection and reporting, reducing human error.

5. Client Focus

Client-Centric Approach: Prioritize client interests by ensuring transparency, especially around remuneration, and engage effectively during renewals and claims to build trust.