A home-insurance cash settlement is not fair merely because the calculation is internally consistent. Good insurance risk governance shows how the offer must reflect realistic repair costs, explain the customer’s choices and account for the extra work and risk transferred when the insurer stops managing the repair.
The 30-second take
ASIC’s 2026 review found that at least 63% of reviewed home claims involved a full or partial cash settlement.
Boards should now test quote quality, preferred-supplier assumptions, vulnerability support, complaint uplifts and the data used to prove that initial offers deliver fair outcomes.
The data contradicts the stated preference
ASIC reviewed claim data, procedures, training and files from IAG, AAI, QBE, Allianz and Sure, representing about 65% of the home-insurance market.
Although insurers said they preferred managed repairs, at least 63% of final claims in the review involved cash, and two of the five insurers used full or partial cash settlements in more than 80% of Cyclone Jasper claims.
The pricing evidence deserves particular attention. ASIC found that 52% of reviewed Cyclone Jasper cash offers relied on one quote, and 73% of those single-quote offers came from a preferred supplier. An internal supplier rate may not be what a homeowner can secure when arranging repairs independently.
Process design can shift harm to the customer
ASIC documented a poorer-practice case where an insurer identified pre-existing window-seal maintenance, offered cash and left the customer to coordinate both excluded and insured work. Its better-practice example involved roof rust: the insurer offered to quote both parts and manage all repairs through one builder if the customer paid for the excluded maintenance work.
The review also found four of five insurers did not consistently apply vulnerability policies in the files examined, and settlement amounts could rise significantly after a complaint.
The General Insurance Code of Practice requires information explaining how home-building cash settlements work and how decisions are made. If a fairer outcome appears only after escalation, the initial control is not doing its job.
Questions for claims and conduct oversight
- Can we show that each cash offer reflects the price a customer can realistically obtain?
- How often do we rely on one quote or a preferred-supplier rate, and what independent challenge is applied?
- Do customers receive a clear scope, assumptions, review rights and explanation of costs they may inherit?
- Are vulnerability indicators recorded and acted on across employees, assessors, builders and other suppliers?
- How often does a complaint increase the settlement, and what root cause does that reveal about the first offer?
- Does the board receive outcome data on cash settlements rather than only speed, closure and average cost?
Visit the Innovation of Risk Reading Room to assess whether claims controls are producing fair customer outcomes before complaints and remediation expose the gap.