Life CCC urges stronger remediation efforts in insurance

Top causes of beaches root from human-related incidents.

Whilst there have been improvements in breach reporting and remediation efforts, insurers must remain vigilant in addressing root causes and enhancing processes through technology and training initiatives, warned the Life Insurance Code Compliance Committee (Life CCC). 

By prioritising proactive measures and continuous improvement, insurers can mitigate risks, enhance compliance, and ultimately deliver better outcomes for customers.

Insights gleaned from the analysis of Annual Compliance Statements submitted by insurers for the 2022-23 reporting period shed light on key patterns and trends in breach reporting within the insurance sector. 

Top causes of breaches

Human-related causes accounted for the majority of reported breaches (79%), followed by deficiencies in process or procedure (16%) and system errors or failures (3%).

Human error was the most common cause, contributing to 46% of breaches, with resourcing issues cited as a significant factor (23%).

The impact of the COVID-19 pandemic, high staff turnover rates, and difficulty with retention were highlighted as contributing factors to resourcing issues. However, efforts to address these challenges are expected in the upcoming reporting period, emphasizing the importance of comprehensive staff training and development programs.

Impact on customers

Breaches impacted 106,266 customers, marking a 47% decrease from the previous reporting period.

Despite an increase in overall breaches, the decrease in impacted customers suggests that insurers are addressing root causes more effectively, particularly those impacting high numbers of customers.

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Remediation efforts

Common forms of remediation included providing information to customers, training staff, and increasing resourcing, mirroring trends from the previous reporting period.

While remediation efforts seem to be driving some improvement, there is still a need for insurers to strengthen their efforts to identify and address root causes, especially for recurring breaches.

Technology and process improvement

Insurers are encouraged to invest in technology to mitigate the risk of human error and enhance reporting capabilities.

Automation of repetitive tasks, monitoring systems for anomaly detection, and predictive processes can help minimize breaches and improve overall efficiency.

Technology-driven insights from breach data can identify common issues and trends, informing product and service enhancements aimed at preventing breaches proactively.