ACIL Cautions That Progress on Expert Reports Masks Unresolved Structural Conflicts

The Australian Consumers Insurance Lobby (ACIL) has welcomed the improvements outlined in the Insurance Code Governance Committee’s new Oversight of External Experts: Follow-Up report, but warns that the findings risk creating a perception that the long-standing problems with insurer-appointed expert reports have been resolved — when the fundamental structural issues remain unchanged.

The Committee highlights several positive developments across insurers, including strengthened training for external experts, enhanced monitoring and quality assurance and new measures preventing experts from recommending whether claims should be accepted or denied. These are important steps forward following a series of regulatory reviews that identified systemic weaknesses in insurers’ use of external experts.

However, ACIL Chairperson Tyrone Shandiman said these changes must not be mistaken for a solution.

“These reforms are welcome progress, but they risk giving the perception that everything is now okay with expert reports. The reality is that the fundamental conflicts and risks for consumers remain.”

Mr Shandiman said the underlying issue is that insurers continue to appoint, brief and pay the experts whose reports may ultimately determine a claim outcome.

“This structure creates a major and unavoidable conflict of interest. While the recent improvements help at the margins, they do not address the core problem — consumers are still reliant on experts who are not genuinely independent.”

ACIL also cautioned that a softening insurance market and improving insurer profitability may artificially reduce disputes related to expert reports.

“If insurers feel less pressure to minimise claim costs, we may naturally see fewer disputes. But that does not mean the system has improved — it simply reflects the market cycle. The underlying risks to consumers will re-emerge in the next hard market.”

The Committee’s report itself acknowledges that progress across insurers has been slow, with many reforms still in development and not expected to be fully implemented until the 2026 financial year. It also highlights that insurers have historically held insufficient data to adequately track expert performance, complaints and report quality.

“It’s hard not to raise an eyebrow at insurers claiming they are ‘training’ external experts. These are qualified professionals engaged for their specialist expertise — yet insurers position themselves as the ones who know better. That raises real concerns about the extent to which ‘training’ becomes a channel for influence rather than independence.”

ACIL believes several critical consumer protections remain missing. Current frameworks do not:

• prevent or prohibit potential influence by insurers on expert findings

• ban performance-based incentives that could favour denial or reduction of claims

• provide an accessible pathway for consumers to challenge inaccurate or biased expert reports

• require transparency regarding vertically integrated or related-party business structures in claim supply chains

Mr Shandiman said existing mechanisms for consumers to challenge expert findings are unrealistic.

“Right now, if a consumer disagrees with an expert report, the most practical option is to fund an alternative report — often thousands of dollars — at a time when they are already financially vulnerable due to a claim being delayed or declined. This is not a fair or balanced system.”

ACIL is calling for structural reform to ensure independence, transparency and genuine accountability in the expert-reporting process.

“We acknowledge the improvements made to date, but they do not fix the foundational issues. Without strong guardrails, clearer independence requirements and accessible avenues for challenge, consumers remain exposed to unfair outcomes.”