Travel insurance most complained about financial product under COVID
Travel insurance most complained about financial product under COVID | Insurance Business Australia
Insurance News
Travel insurance most complained about financial product under COVID
It was more complained about than credit cards and home loans
Insurance News
By
Jen Frost
More than 17,000 COVID-related financial product or services complaints have been made to the Australian Financial Complaints Authority (AFCA) and travel insurance was the most complained about product, the ombudsman service has revealed.
From 12 March 2020 to 6 May 2023, 17,403 COVID-related complaints about financial services products or services were levelled. This accounted for 7% of all complaints received by AFCA over the period, and consumers bagged compensation or refunds of $21.6 million.
One-in-four, or 4,368, COVID-related disputes were about how firms had responded to consumers’ financial difficulties.
Travel insurance tops COVID-related product complaints to AFCA
Travel insurance was the most complained about financial product in COVID-related disputes, AFCA said, with 3,859 complaints. Disputes typically centred on denied or delayed insurance claims following pandemic lockdown disruption.
AFCA received 1,594 complaints from small businesses, and they accounted for 9% of COVID-related complaints despite usually representing 5% of all AFCA’s complaints. While a majority of these (781) centred on business loans, 360 complaints were received about business interruption insurance.
What were the top five AFCA complaints by product?
AFCA reported the top five complained about products, and the number of COVID-related complaints, were:
Travel insurance 3,859
Credit cards 2,703
Home loans 2,254
Personal loans 1,629
Superannuation 1,134
While travel insurance topped individual product complaints, credit was the top complained about product line, with 48% of all COVID-related complaints, or 8,462. General insurance came in second at 30%, with 5,236 complaints.
The most complained about issues under COVID
The most complained about issue was failing to respond to a request for assistance, with denial of insurance claim due to exclusion or condition coming in second. Denial of insurance claim more broadly rounded out the top three.
What were the top five COVID-related issues complained about to AFCA?
The following issues were most complained about, according to AFCA:
Failure to respond to a request for assistance 2,404
Denial of insurance claim due to exclusion or condition 1,463
Denial of insurance claim 1,454
Delay in insurance claim handling 1,286
Service quality 1,162
The ombudsman said that 97% of COVID-related complaints have so far been resolved, with 79% going in favour of the complainant or having been resolved by agreement.
“While not seeking to downplay what people went through – every complaint matters – we received far fewer COVID-related complaints than we thought might arise from the pandemic,” said AFCA chief ombudsman and CEO David Locke. “Banks, for example, were generally quick to respond, providing emergency support as they handled an unprecedented volume of requests for repayment deferrals.
“It shows what’s possible when firms and consumers talk to each other.”
Locke said the organisation hopes that financial firms maintain a “similar mindset as we face new challenges amid rising interest rates and cost of living pressures.”
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