Did you know that one in six customer complaints to Australian insurers go unnoticed? ASIC’s latest report into the insurance industry’s complaints management processes[1] shows that insurers are missing the mark on compliance.
The report found significant shortcomings in meeting the obligations set out in Regulatory Guide 271 (RG 271)[2], underscoring the need for insurers – and companies across the financial services industry – to raise their complaints management game.
Achieving this goal will require process improvements supported by software solutions that are tailored to ASIC’s complaints management requirements.
Struggling with RG 271 compliance? See how Protecht ERM’s dedicated off-the-shelf RG 271 package can transform your complaint handling. Schedule a demo today:
Key findings from ASIC’s report
ASIC identified critical areas where insurers are falling short, jeopardising both compliance and customer trust. These include:
- Missed complaints and inadequate tracking: Insurers failed to recognise one in every six customer complaints. This means many customers were denied their rights under internal dispute resolution (IDR) frameworks. Adding to this, nearly half of the insurers reviewed were unable to identify a single systemic issue, despite external bodies like the Australian Financial Complaints Authority (AFCA) uncovering numerous systemic problems.
- Failure to meet timeliness standards: RG 271 requires insurers to acknowledge complaints within 24 hours and resolve them within 30 days. However, some insurers only acknowledged 60% of complaints within the stipulated timeframe. Others failed to notify customers of delays in more than one-third of cases, with the poorest performers missing deadlines in over 90% of instances.
- Inconsistent communication: ASIC’s findings revealed gaps in complaint responses. One in eight rejected complaints lacked sufficient reasoning or escalation details, falling short of RG 271’s requirements. Many delay notifications did not inform customers of their right to escalate the matter to AFCA.
- Limited oversight and reporting: Boards and senior management were often left in the dark due to insufficient data on complaints. This lack of visibility prevents organisations from identifying trends, addressing systemic issues, and ensuring regulatory compliance.
These findings point to an “immature complaints culture” across the industry. ASIC Commissioner Alan Kirkland emphasised that a strong complaints management system isn’t just about avoiding regulatory penalties – it’s a cornerstone of delivering better outcomes for customers. A failure to act not only risks financial and reputational damage but also misses opportunities to build long-term customer loyalty and trust.
Why RG 271 compliance requires more than spreadsheets
For many organisations, managing customer complaints still relies heavily on manual processes like spreadsheets. While this might seem cost-effective in the short term, ASIC’s recent findings show the limitations of these tools in ensuring compliance with RG 271:
- Inconsistent complaint tracking: Spreadsheets make it difficult to ensure every complaint is properly recorded and tracked. This leads to missed deadlines, incomplete data, and poor oversight – leaving firms vulnerable to breaches of RG 271 requirements.
- High risk of oversight and errors: Manual data entry is prone to human error, which can result in incomplete or inaccurate records. Missing key details in complaints can hinder timely resolution and escalate regulatory scrutiny.
- Time-intensive reporting: Preparing complaint reports for boards, senior management, or ASIC using spreadsheets can be labour-intensive and time-consuming. This slows down decision-making and reduces the ability to act on insights in real time.
- Lack of real-time visibility: Spreadsheets fail to provide a clear, real-time picture of complaint trends, systemic issues, and resolution status. Without centralised visibility, it becomes nearly impossible to meet ASIC’s expectations for proactive oversight and governance.
- Inflexibility in handling multi-channel complaints: Customers use multiple channels to lodge complaints, from email and social media to online forms. Legacy systems aren’t built to capture and process complaints from diverse sources, increasing the risk of missed complaints and non-compliance.
The case for automation and integration with Protecht ERM
To meet RG 271’s rigorous requirements, financial firms need a solution that:
- Centralises complaint management: An integrated system ensures all complaints – across all channels – are captured, tracked, and escalated.
- Automates key processes: Notifications, deadline management, and reporting can be streamlined, reducing administrative burdens and improving accuracy.
- Provides real-time insights: Dynamic dashboards and automated reporting ensure that senior management and boards have a clear view of complaints data at all times.
- Ensures consistency: Automated workflows ensure every complaint is handled in line with RG 271’s standards, minimising the risk of oversight.
Here’s how Protecht ERM’s dedicated off-the-shelf RG 271 Marketplace package directly addresses the key areas of RG 271 compliance:
Comprehensive complaint recording
Protecht ERM centralises all complaint data in one place, ensuring that nothing slips through the cracks. Key capabilities include:
- Consistent data capture: Quickly log and store all details related to each complaint, including affected products, issues, outcomes, and supporting documentation.
- Auditable records: Maintain a detailed trail of all actions taken, enabling complete transparency and accountability.
- Multi-channel coverage: Capture complaints from email, social media, online forms, and more, ensuring no complaint is overlooked.
Streamlined reporting to ASIC, management and the board
Protecht ERM turns complaint data into actionable insights with its dynamic dashboards and real-time reporting capabilities:
- ASIC data reporting: Generate compliant data files for seamless reporting to ASIC, saving time and reducing manual effort.
- Management and board reporting: Deliver insights to senior management and boards, empowering them to oversee complaints handling effectively.
- Systemic issue detection: Identify trends and recurring problems to address systemic issues proactively.
Automated workflows for timely resolution
RG 271 requires strict adherence to timelines for acknowledging and resolving complaints. Protecht ERM simplifies this by automating key processes:
- Automated notifications: Automated notifications of new complaints help you meet ASIC’s 24-hour acknowledgment requirement.
- Deadline tracking: Configurable alerts and reminders ensure teams are aware of approaching deadlines and can take prompt action.
- Escalation workflows: Automate the escalation of complaints to ensure timely resolution within the required 30-day timeframe.
Enhanced governance and culture of compliance
Protecht ERM doesn’t just meet RG 271 requirements – it helps organisations create a culture of compliance and continuous improvement:
- Built-in governance tools: Link complaints to risks, obligations, incidents, and controls to provide a holistic view of your compliance landscape.
- Proactive oversight: Equip boards and senior management with the tools they need to ensure accountability and alignment with ASIC expectations.
Conclusions and next steps for your organisation
Protecht ERM is designed to meet the unique challenges of RG 271 compliance. Its features are designed not only to reduce administrative burdens but also to provide strategic value:
- Effortless compliance: Meet ASIC’s requirements with confidence, reducing the risk of regulatory breaches.
- Operational efficiency: Free up resources by automating manual tasks, allowing your teams to focus on strategic priorities.
- Future-ready: Protecht ERM’s flexible, scalable platform grows with your organisation, adapting to evolving regulatory needs.
By choosing Protecht ERM, financial firms can move beyond compliance, unlocking better customer outcomes, stronger governance, and improved operational efficiency.
Struggling with RG 271 compliance? See how Protecht ERM’s dedicated off-the-shelf RG 271 package can transform your complaint handling. Schedule a demo today:
References
[1] ASIC, Cause for Complaint: Complaints Handling in General Insurance