In results it labelled “promising”, the LCCC’s 2024-25 Annual Industry Data and Compliance Report revealed there was an overall reduction in breaches affecting large numbers of customers.
The report found the total Code breaches fell 27 per cent from 14,670 the previous year to 10,697, while the number of customers impacted by breaches plunged 87 per cent year-on-year, from 210,442 to 27,289, the lowest in a decade.
Supporting the broader improvement, significant breaches halved from 32 to 16, while customers affected by significant breaches dropped 96 per cent from 182,120 to 8,171.
However, the report also found that delays in income protection payments increased over the past year, something the LCCC said highlights “ongoing challenges insurers have in meeting important commitments”.
LCCC chair Jan McClelland said the reduction in customers affected by breaches was encouraging, but sustained improvement depends on insurers addressing the causes of recurring issues.
“Insurers must ensure their systems, controls and oversight are strong enough to prevent repeat issues and support reliable outcomes for customers,” McClelland said.
LCCC added that breaches related to timely payment of income protection benefits rose significantly, with more customers experiencing delays in receiving payments intended to support them when they are unable to work, signalling an area of improvement for the industry.
Breaches related to paying income benefits on time rose 67 per cent year-on-year, increasing from 997 to 1,663, while customers impacted by those delays increased from 1,000 to 1,676 over the same period.
“Income protection benefits are designed to provide financial stability at a time when customers may be at their most vulnerable,” McClelland said.
“Delayed payments can place additional strain on people who are already dealing with significant personal and financial challenges.”
Despite the overall reduction in complaints, which were down 11 per cent from 60,303 to 53,613, complaints related to total and permanent disability (TPD) cover have been steadily rising for several years.
TPD claim complaints rose from 2,559 to 3,089, with complaints about claim benefit adjustments surging 102 per cent and complaints about claim handling rising 33 per cent.
At the same time, complaints about claims handling rose from 10,069 to 10,644, driven largely by TPD disputes.
The group said this is a reflection of the complexity of these claims and the challenges customers can face when navigating them.
“These claims are often made in difficult and complex circumstances and customers need confidence that insurers’ processes will support timely, consistent and well communicated outcomes,” McClelland explained.
“Understanding the drivers of dissatisfaction is an important step in improving both processes and customer experience.”
This could also be explained through the higher volume of TPD claims related to mental ill-health, which has been fuelling a surge in income support claims.
The LCCC said the report highlights areas where insurers are making progress, as well as opportunities to strengthen compliance and improve outcomes for customers.
Going forward, the Committee will continue to work with insurers to support sustained improvements in claims handling, communication and overall Code compliance.
