The General Insurance Code Governance Committee (CGC) has issued sanctions against Allianz Australia Insurance Limited (Allianz) following an investigation into claims related to the February 2022 NSW and Southeast Queensland Floods (CAT221).
The CGC initiated an investigation after concerns were raised regarding Allianz’s compliance with the General Insurance Code of Practice.
During the course of the CGC’s investigation Allianz reviewed 47 claims linked to CAT221. These reviews found that five of the claims that were previously declined contained inconsistencies in Allianz’s decision-making processes, and led to Allianz accepting claims that it had previously denied.
While acknowledging operational challenges post-CAT221, the CGC emphasised insurers’ responsibility to ensure they consider all relevant facts carefully before making a decision on a claim. This includes having robust quality assurance processes when relying on external expert reports. Failures to detect clear inconsistencies in expert reports and implement effective controls were cited as significant breaches.
The CGC determined that Allianz significantly breached its obligations in the Code of Practice and imposed sanctions:
- A $50,000 community payment to a registered charity.
- Requirement to publish details of the determination and sanction on its website.
Allianz has paid out $216,807.44 for the overturned claims and implemented improvements in its claims-handling processes since the investigation.
The GICGC urges insurers to review and strengthen systems, processes, and quality controls to ensure consistent and fair claims decisions, especially during catastrophic events.