The Australian Financial Complaints Authority (AFCA) has released an updated external dispute resolution (EDR) response guide for claim delay complaints, focusing on disputes arising from delays in general insurance claims. The revision reflects current practice and changes to AFCA’s own processes, and sets out the information it expects from insurers when a delay-related complaint reaches external dispute resolution.
The guide sits within AFCA’s broader EDR response materials, which outline what financial firms should provide once internal dispute resolution has been completed and the matter remains unresolved. AFCA says the revised claim delay guide is intended to support earlier resolution of complaints where delays in claims handling are in dispute, including cases where better communication or clearer expectations might have reduced the likelihood of escalation. For insurers, the changes draw attention to AFCA’s focus on the timeliness and transparency of claims handling, including how reasons for delay, next steps, and timeframes are documented and communicated to policyholders throughout the life of a claim.
The updated guidance follows AFCA’s 2024–25 Annual Review, released in October 2025, which reported that complaint volumes exceeded 100,000 for the second consecutive financial year. AFCA has associated the figures with ongoing cost-of-living pressures on households and areas where firms’ dispute-handling arrangements can be strengthened. “We know many Australians continue to feel financially stretched and stressed – and behind every complaint, we receive is a person seeking fairness and resolution in a time of uncertainty. In times of economic pressure, it’s critical that financial firms strengthen their internal dispute resolution processes and ensure resources are available to deal with disputes in a fair and timely manner,” chief ombudsman and chief executive officer David Locke said.
Banking and finance remained AFCA’s largest complaint category in 2024–25, accounting for more than half of all lodged cases. While overall financial difficulty complaints declined, “failure to respond to a request for assistance” stayed among the most common issues, indicating that hardship and customer assistance processes continue to feature prominently in disputes. Large collapses in the financial advice sector again contributed to elevated complaint numbers, with disputes against advisers and advice licensees increasing year on year. Complaints involving self-managed superannuation funds (SMSFs) and “failure to act in the client’s best interest” also rose sharply, maintaining scrutiny on advice models and conflicts.
General insurance continued to be a substantial source of complaints, with AFCA receiving 34,231 general insurance complaints in 2024–25, a 17% increase on the prior year. AFCA attributed much of this uplift to disputes involving add-on insurance products. Excluding add-ons, general insurance complaint volumes were broadly consistent with the previous two years. AFCA has stated that a significant share of escalated general insurance complaints involves delays in claim handling, including cases where claim outcomes may ultimately be accepted but where customers are dissatisfied with the length of time taken or the level of communication during the process.
Locke said: “Persistently high volumes of complaints about general insurance demonstrates there is more to be done by the sector to prevent complaints reaching AFCA, particularly in cases where escalation could have been avoided if the issue was simply a claim delay. Proactive and clear communication with customers can often be the very thing that stops a complaint from being escalated in the first place.” The updated claim delay guide is expected to influence how insurers document claim progress, record contact with customers, and prepare material that may later form part of an EDR response, with an emphasis on clear timelines and evidence of ongoing engagement.
AFCA has also highlighted complaint trends affecting Aboriginal and Torres Strait Islander peoples. In 2024–25, AFCA received 2,461 complaints from First Nations complainants across banking, superannuation, and insurance. Recurring issues included unauthorised transactions, delayed or incomplete responses to financial difficulty requests, extended delays in responses to claims and complaints, and mis-selling of funeral and other insurance products. AFCA has reported that digital exclusion and higher costs of accessing financial services in regional and remote communities are affecting engagement with financial firms. “First Nations people continue to face disproportionate challenges and barriers when interacting with financial services and our data likely reflects only a fraction of the problem. Year after year the same patterns persist, and many people never reach external dispute resolution because of the frustration they experience dealing with firms. First Nations people deserve to be able to access every day financial services other Australians take for granted,” AFCA deputy chief ombudsman Dr June Smith said.
Smith noted that limited internet access, unreliable mobile coverage, and bank branch closures can affect the ability of customers to lodge insurance claims, manage superannuation, and receive updates from providers. “Not having digital access can have many impacts – from making insurance claims, accessing and engaging with superannuation accounts, and receiving timely updates from financial firms. A priority for AFCA is equity of access for everyone, and I encourage all financial firms to think about the equity of access they offer to their own customers,” Smith said.
AFCA has called on financial firms to review how automated processes – including those used in internal dispute resolution – identify and respond to digital exclusion, language and cultural barriers, vulnerability, hardship, and financial abuse. It has emphasised the role of human review points and culturally competent staff when dealing with First Nations customers. Current independent reviews of industry codes of practice are being framed as a chance to set more consistent expectations for First Nations engagement and support for regional and remote customers.
AFCA has also revised its own approach to complaints from First Nations peoples under its Equity of Access program and reconciliation initiatives, with an emphasis on culturally informed and accessible dispute resolution. “Through our Equity of Access program and Reconciliation Plans, AFCA is embarking on further improvements to how we work, to ensure every First Nations person has the same opportunity for a fair process and a fair outcome. We recognise that people come to us with different needs and experiences, and for some the process can feel daunting. This program marks the beginning of a major shift in how we deliver our service, so people feel seen, heard, supported, and able to participate fully in their complaint,” Smith said. For insurers and other financial firms, AFCA’s updated claim delay guidance, complaint statistics, and First Nations data collectively point to continued attention in 2026 on claims timeliness, communication practices, accessibility of services, and cultural capability.
