ASIC Tells General Insurers to Fix Premium Disclosure, Cash Settlements and Claims Management Firm Conduct

Australia's corporate and financial regulator has told general insurers where it will be looking over the next year, and the message is that clearer pricing and fairer claims handling are not optional. In a letter dated September 30, 2026, ASIC Commissioner Alan Kirkland set out the regulator's general insurance priorities for 2026-27, responding to industry requests for more transparency on what ASIC will focus on. The letter links to the regulator's Corporate Plan priority of improving outcomes for consumers and small businesses and says ASIC will monitor the whole insurance lifecycle: product design, distribution, pricing and disclosure, claims handling and dispute resolution.

One new focus is the growing role of for-profit claims management firms, which are sometimes called disaster chasers. Insurers and consumer advocates have raised concerns about how these firms acquire clients, the fees and cancellation terms they charge, their role in claims and complaints handling, and their commercial ties to repairers and suppliers. ASIC says it will review firms that help consumers with home insurance claims, including in disaster-affected areas, and will request information from both insurers and the firms. The work begins in the first quarter of the 2026-27 financial year, which started in July.

A second new focus is the General Insurance Code of Practice. The Insurance Council of Australia has committed to seeking ASIC approval for a new code and held public consultation in July 2026. Once the draft is submitted, ASIC will assess it under Regulatory Guide 183, consulting stakeholders and the council. Insurers may also be drawn into wider ASIC reviews of sustainability reporting, corporate governance and financial reporting.

The letter also reports findings from two earlier pieces of work. The first concerns motor vehicle premium disclosure, published as Report 838. ASIC reviewed quotes, renewals and supplementary documents from participating insurers and carried out consumer research through an online survey and interviews. It found that none of the sampled insurers explained the key drivers of a premium or why it had changed from the previous year. Renewal notices for insurers that charge more for instalments did not clearly state that paying annually could save 10 to 20 percent. Five insurers did not directly compare year-on-year changes in important features such as the insured value or the excess.

ASIC recommended that insurers explain what drives a premium and why it changed, show how the excess, the cover options and the payment method affect price, state the total cost of paying by instalments and the dollar difference compared with paying annually, compare changes in the policy from year to year, and make key information prominent at renewal. The regulator has given individual feedback to the insurers that took part and says it will keep monitoring the market.

The second finding concerns cash settlements in home building insurance after Cyclone Jasper. ASIC reviewed all Cyclone Jasper claims from the insurers involved, together with a sample of claim files, policies and procedures. At least 63 percent of finalised home insurance claims included a cash settlement. Offers were often based on quotes from preferred suppliers, which raised doubts about whether the amounts covered the real cost of repairs. Consumers needed clearer information about what settlements included and about their rights to ask for a review. Vulnerable consumers were not always identified or properly supported, and insurers lacked data on how settlement offers changed during a claim and why.

These points matter because a cash settlement can be convenient but risky. If a homeowner accepts a sum that is too low to cover repairs, especially at a time when builders and materials are in short supply after a disaster, they may have to pay the difference themselves. Consumers who are offered a cash settlement should ask how the amount was calculated, whether it is based on the insurer's preferred supplier or on independent quotes, what happens if repairs cost more, and how to request a review. They can also seek a second quote from a licensed builder and, if they remain dissatisfied, take the matter to the Australian Financial Complaints Authority.

ASIC says it will work with the Australian Prudential Regulation Authority, the Australian Financial Complaints Authority and the General Insurance Code Governance Committee to share priorities and avoid duplication, and will engage other members of the Council of Financial Regulators on issues such as emerging cyber risks and their conduct implications. It also plans to work with APRA and other regulators to streamline data collection under the council's Better Regulation roadmap and asks the sector to report examples of duplication or unnecessary regulatory burden.

For insurers, the practical message is to act on the premium-disclosure and cash-settlement findings before ASIC tests them again, and to be ready for questions about any relationships with claims management firms. For consumers, a few simple habits stand out: compare the annual and instalment price at renewal, ask your insurer what drove any increase, check how your excess and cover choices change the premium, and treat any claims-management firm's contract with the same care you would give an insurance policy. The letter does not set a hard deadline beyond the start of the claims-management review, so the real test will be what ASIC reports from its monitoring over the coming year.