AFCA updates its response guide for claim delay complaints

The Australian Financial Complaints Authority (AFCA) has updated its guide for claim delay complaints, with a focus on resolving complaints related to general insurance claim delays in a more timely and effective manner.

The updated guide forms part of a series of External Dispute Resolution (EDR) Response Guides published by AFCA outlining the necessary information financial firms must provide when preparing a response to an unresolved complaint after internal dispute resolution.

The revisions set out clearer guidance for financial firms preparing a response to delay-related complaints at the external dispute resolution stage. It also clarifies expectations for insurers around timeliness, communication, and claim progression in delay complaints.

Key updates

While the updated guidance does not materially change the structure of EDR responses, there is a greater emphasis on the quality of documentation, communication records and claim timelines to help AFCA engage with insurers to efficiently resolve avoidable insurance claim delay complaints.

In particular, the guide emphasises the need for EDR responses to include:

• A complaint summary: A clear and concise overview of the complaint, including key identifying information such as the financial firm name, financial firm reference, complainant name and AFCA reference number. AFCA expects this information to be clearly set out at the outset of the EDR response to ensure the complaint is properly identified and assessed, and to minimise delays caused by administrative clarification during the EDR process.
• A policy summary: A clear summary of the relevant policy information, including details of the insured, policy number, policy type, insured property and applicable excess. AFCA expects this information to be clearly set out to provide context for how the claim was assessed and progressed, and to assist in determining whether the handling of the claim and any associated delays were reasonable in light of the policy terms.
• An outline of the complainant’s position: A clear summary of the financial firm’s understanding of the complainant’s position, including relevant background information such as the claim type and amount, any payments made to the insured, any service or handling concerns raised, and the outcome the complainant is seeking. AFCA expects financial firms to demonstrate that the complainant’s position has been properly understood and considered, particularly in relation to the nature of the alleged delay and its impact. Clearly articulating the complainant’s position assists AFCA in identifying the issues in dispute, and assessing whether the firm’s response appropriately addresses those concerns.
• The firm’s reasons for its position: A detailed explanation of how the financial firm has considered all issues raised in the complaint and the reasons for its position, including the information relied upon to reach that view. AFCA expects financial firms to demonstrate that they have considered their obligations and whether those obligations have been met in the handling of the claim. In relation to claim delay complaints, this includes explaining whether the claim decision was made within a reasonable timeframe, whether any actions or inactions by the financial firm contributed to unreasonable delays, and what steps were taken to manage or mitigate those delays.
• An overview of the firm’s position: A consolidated statement setting out the financial firm’s overall position on the complaint, drawing together the factual background, policy context and response to the issues raised. This overview assists AFCA and the complainant to understand how the firm’s reasoning, evidence and actions align with its handling of the claim.
• Any jurisdictional issues: Identification of any jurisdictional matters the firm wishes to raise, with reference to the relevant sections of the AFCA Rules or Operational Guidelines. AFCA expects any jurisdictional objections to be clearly articulated, appropriately referenced and supported by relevant information, to enable efficient consideration of whether the complaint falls within AFCA’s jurisdiction.
• An optional overview of the complainant’s response to the firm’s position: Where relevant, a summary of how the complainant has responded to the firm’s position, including any ongoing areas of disagreement. This assists AFCA to identify the issues that remain unresolved following the firm’s response, and assess whether further engagement or clarification may assist in resolving the complaint.
• Proposals for how the complaint may be resolved: Details of any steps the firm is willing to take to resolve the complaint, including proposed settlements, remedial actions or consideration of non‑financial loss. The guide highlights AFCA’s focus on early and practical resolution, particularly where delay complaints may be resolved without the need for prolonged EDR.
• Supporting information: Comprehensive supporting documentation, such as denial or claim decision letters, claim correspondence, claim forms, timelines or chronologies of events, claim notes and other relevant records. AFCA places particular importance on clear and complete chronological evidence that demonstrates how the claim was progressed, how delays arose, and what steps were taken to manage those delays.

Reason for the update

The purpose of the updated guide is to support earlier and more efficient resolution of claim delay complaints once they escalate to EDR. AFCA has identified that many delay‑related disputes are prolonged by incomplete information, unclear explanations or inconsistent documentation, and the updated guide is intended to address those issues at the EDR stage.

The updated guidance follows sustained complaint volumes across financial services. In the 2024–25 financial year, general insurance complaints increased by 17%, rising to 34,231 complaints,¹ with delays in claims handling remaining a leading driver of escalation to AFCA. In response, AFCA has invested in additional resources, including the recruitment of staff and the creation of specialist teams, to manage increasing demand and improve the efficiency of dispute handling.

For financial firms, the updated guide reinforces AFCA’s expectation that clear, structured and well‑supported EDR responses are critical to reducing unnecessary escalation. By setting clearer expectations around how delays should be explained, evidenced and addressed, AFCA aims to help financial firms resolve disputes earlier and minimise the duration and cost of the EDR process.

As AFCA’s Chief Ombudsman and CEO David Locke has repeatedly emphasised, ‘proactive and clear communication with customers can often be the very thing that stops a complaint from being escalated in the first place’.² The updated guide reflects this message by placing renewed focus on transparency, communication and active delay management as core elements of effective dispute resolution.

What does this mean for your business?

According to AFCA data, complaint volumes remain elevated across financial services, reflecting ongoing financial pressures on consumers and increased scrutiny of claims handling and service quality. The updated guide highlights the need for insurers and other financial services businesses to strengthen how they manage, document and explain claim delays once a dispute escalates to EDR.

For financial firms, the updated guide reinforces that delay complaints are not assessed solely on the length of time taken to resolve a claim, but on how delays are managed, communicated and evidenced. Clear timelines, well‑supported explanations and proactive engagement with customers are increasingly critical to demonstrating that delays were reasonable in the circumstances.

To reduce escalation risk and the time and cost of prolonged EDR engagement, businesses should review their EDR response processes to ensure they can consistently produce clear and evidence‑based responses addressing delay drivers, mitigation steps and customer communications.

¹ General insurance complaints | Australian Financial Complaints Authority (AFCA)
² ‘2024-25 Annual Review: complaints still too high, as households continue to face cost-of-living pressure' - Australian Financial Complaints Authority (AFCA) (23 October 2025)