Claims handling failures expose deeper operational strain across insurance sector

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Key points Claims handling failures accounted for 59% of all code breaches reported across the industry. Delays in customer updates and claims decisions increased sharply, exposing operational pressure inside insurers. Weak data collection is limiting the industry’s ability to measure...

01 Jun 2026

4 mins read

Claims handling failures expose deeper operational strain across insurance sector

Summary

Australia’s general insurance claims handling performance is under the microscope again after a major rise in code breaches reveals persistent delays, weak operational visibility and growing concerns about customer outcomes.

Key points

Claims handling failures accounted for 59% of all code breaches reported across the industry.
Delays in customer updates and claims decisions increased sharply, exposing operational pressure inside insurers.
Weak data collection is limiting the industry’s ability to measure and address claims handling delays.
Reported reductions in hardship and vulnerability breaches contrast with rising customer complaints.
Insurers may need stronger systems, operational oversight and root-cause analysis rather than relying on “human error” as an explanation.

Claims handling remains the largest source of non-compliance across Australia’s general insurance sector, with new figures revealing growing pressure around delays, customer communication and operational oversight.

The latest Annual Industry Data and Compliance Report (2024–25) from the General Insurance Code Governance Committee (GICGC) recorded 70,325 breaches of the General Insurance Code of Practice, up 20.5% year on year. Claims handling failures accounted for 59% of all breaches.

The report paints a picture of an industry managing increasingly strained claims operations while struggling to maintain consistent customer outcomes and compliance standards.

Particularly concerning was the rise in breaches involving delays to customer updates and claims decisions.