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Issues around insurance claims processing, risks to investors from the boom in private markets and the use of artificial intelligence by the financial sector will be among the areas of focus for the corporate watchdog over the next year and beyond.
Amid rising car and home insurance premiums and a slew of customer complaints, the Australian Securities and Investments Commission (ASIC) has pledged to scrutinise the sector in its new corporate plan.
The 2022 East Coast floods, including Lismore, NSW, were the most expensive insurance event in the country's history.credit: Elise DeRouen
The plan provides new details on how ASIC will direct its strategic priorities, saying “action against insurance misconduct” will be one area of focus.
“We will take action against insurers in relation to claims handling, particularly in relation to home insurance claims,” ASIC says in the plan, which will be released on Thursday.
Insurance companies have faced parliamentary inquiries in recent years after the 2022 East Coast floods sparked a wave of customer complaints and the industry scrambled to deal with the most expensive insurance event in the country's history.
Complaints about general insurance have hit an all-time high, up 4% in the year to June, after a 50% rise the previous year, the Australian Financial Complaints Commission said this month. Insurers have acknowledged failings in their systems, processes and resources and pledged to improve them. The Australian Securities and Investments Commission said it was also examining insurers’ commitments to improve claims handling.
ASIC's plan, launched by its chairman Joe Lungu, also underlined the regulator's focus on the rapid growth of private markets as more investors seek higher returns from debt or equities not listed on public exchanges.
The Australian Securities and Investments Commission said it would launch a review of the growth in private markets and the implications for the efficiency and integrity of public markets. Private credit funds allow investors to lend to companies that might struggle to borrow from banks — offering investors higher returns, but raising questions about risk and transparency.
Lungu noted that ASIC’s corporate plan included a new strategic priority of enhancing consistency and transparency across markets and products.
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