A Parliamentary inquiry has heard insurers describe a 'challenging' year, processing flood insurance claims while making a $4.6 billion profit.
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Andrew Hall, CEO of Climate Operations & Strategy for the Insurance Council of Australia said the year had "tested our systems, processes and people like never before".
In response to concerns raised by customers and insurers ICA commissioned an independent review by Deloitte.
"Even the most comprehensive internal catastrophe plans were exceeded as a range of factors collided to impact the sector and the normal [catastrophe] recovery conditions," he said.
"Issues were exposed in insurers' claims and complaint handling responses-timely communications, identification of vulnerability, resourcing internally and externally, processes and technology and governance."
Andrew Gee MP has appeared as a supplementary member for the committee, with his electorate being particularly affected by the floods, Gee was scathing in his reply "The industry is not making a loss. ASIC told us last week that net profit after tax for insurers was $4.6 billion, up 408.2 per cent."
Mr Hall said profits were not as clear cut as they may seem.
"When you unpack that profit... it was from return on investment pools," he said.
The hearing also heard in a previous submission from Laura Powell, a financial counsellor working for Anglicare, assisting victims in navigate their claims in the insurance system.
Her submission described an Insurance Council event where a town hall-style consultation had been established for victims to raise any issues with their claims with insurers.
Powell told the inquiry "We unfortunately were witness to seeing insurers talking about their bonuses in front of people who are crying on the floor."
Her submission also highlighted the difficulty and delays in processing claims was systemic, with policy holders feeling pressured to take early cash settlements - often far less than they would otherwise be entitled to.
"We see evidence of tactics to really put pressure onto people just to go, 'I can't go through this anymore. I'm going to accept a cash settlement," she said.
The inquiry's Terms of Reference cover the floods in south-east Queensland and northern NSW in February and March; in greater Sydney and the Hunter Valley in July; in Victoria, NSW and Tasmania in October; and in the central west of NSW in November and December.
So far, 391 people have also provided feedback about their experience with their insurer.
Australia's eight largest insurers have also lodged submissions, which have provided insights into how prepared each insurer was to deal with the record number of flood-related claims made in 2022; the measures taken to improve their preparedness for weather-related claims; and the effects of skills, labour and materials shortages on handling claims
The inquiry continues next week and will hear from the The Australian Financial Complaints Authority.