2025 AICLA Claims Convention to unpack the issue of vulnerable customers

There is no one-size-fits-all template for how insurers should identify and treat vulnerable customers across South-East Asia.

The levels of regulation and approaches vary from country to country. But while their definitions of vulnerable customers differ, the basics are similar.

Defining vulnerability

Karen Stevens, the Insurance & Financial Services Ombudsman (IFSO) and CEO, says vulnerability refers to a person’s increased risk of experiencing harm or disadvantage due to their circumstances or features of the market.

“These circumstances may include financial hardship, disability, hearing or visual impairment, language barriers, addiction, domestic abuse, illness, bereavement or the impact of natural disasters. Vulnerability is not a fixed trait — it is dynamic, situational and can affect anyone at any time.”

ANZIIF CEO Katrina Shanks notes that vulnerability can present in many forms. “Insurance professionals must be attuned to subtle cues during interactions, such as confusion, emotional distress, or when a third party dominates the conversation,” she says.

Recently, a New Zealand-based insurance professional assisted a claimant with impaired vision and speech following a stroke. She arranged a face-to-face meeting with the claimant and their daughter, read the claim form aloud and facilitated translation and completion collaboratively.

This approach ensured the customer’s needs were met, but not all insurers are going to the same lengths.

“In our complaints work, we see cases where the insurer has not identified the complainant as experiencing vulnerability and has not approached the resolution of the claim or complaint in an appropriately sensitive way in response to the vulnerability,” says Australian Financial Complaints Authority (AFCA) Lead Ombudsman, Insurance, Emma Curtis.

“For example, insurers could assume that each disaster-related claim or claim for the total loss of a home, means the customer is probably experiencing vulnerability and should be responded to accordingly. Empathy and compassion are always important, but even more so in these situations.

“Loss of a home causes trauma and disruption, and this affects how effectively customers can manage their insurance complaint.”

Learning to listen

So, how can insurers lift their game? While regulatory and industry guidance across South-East Asia varies, there are some worthwhile practices they can embrace.

Shanks’ advice to insurance professionals is to “listen actively, tailor your communications and always provide avenues for claimants to articulate their needs”.

She says clear documentation, flexibility and consistent follow-up are essential, as are robust internal support systems, such as regular supervision and debriefing.

Stevens recommends asking the claimant what their needs are first and foremost.

“We know that complainants typically under-report when they are experiencing vulnerability. So, it’s important that firms actively seek to understand whether there are any circumstances – temporary or otherwise – that mean someone is experiencing vulnerability and may need different kinds of support,” she says.

“Other tips include using plain language, offering multiple communication channels, allowing extra time for decision-making and importantly, documenting all interactions back to the customer in writing.

“Often, customers in vulnerable circumstances fail to remember what was said or agreed in meetings or actually get it wrong.

"The written follow-up with actions, agreements and timeframes is vital. Flexibility, patience and taking time with a customer go a long way.”

Signs to look for

Stevens notes that identifying vulnerability requires attentiveness and empathy.

“Signs may include confusion, distress, forgetfulness, difficulty communicating, or the presence of a third party who appears to be controlling the interaction,” she says.

“These signs often emerge during conversations, claims handling or when reviewing product or advice documentation.”

Stevens adds: “Staff should be trained as early as possible, so they are capable, confident and supported in identifying people who are experiencing vulnerability.

"They should also be empowered to provide those people with help that’s tailored to their needs. This extends to anyone representing the insurer and engaging with the customer.”

Curtis says approaches to customers experiencing vulnerability should be embedded across claims and complaints teams, rather than compartmentalised.

Regarding communication, she says: “Customers are not insurance experts and suffering from a traumatic event exacerbates the challenges of navigating the insurance claim process.

“Identifying vulnerability is not something that is confined to the first interaction with customers or complainants but should be an ongoing focus.”

Understanding boundaries

Stevens notes that maintaining professional boundaries with customers is important.

“Insurance professionals must balance empathy with objectivity, using structured processes to guide interactions and referring to specialists where appropriate,” she says.

“It’s important not to become the sole support person for a claimant, but rather to ensure they are connected to the right help.”

Stevens believes escalation should occur when the customer’s needs exceed the frontline staff’s capacity, when there are signs of harm, coercion, or abuse, or when specialist intervention (such as translation or mental health support) is required.

“Escalation pathways should be clearly defined in internal policies and supported by training,” she says.

When it comes to the responsibilities of claims professionals and loss adjusters, Shanks says the industry’s duty is clear: treat every claimant with fairness, empathy and flexibility.

“It is great to see that many organisations already have specialised vulnerable consultants who are available to work more closely with clients who have been identified as vulnerable.

"We promote clear internal guidelines and pathways, something reinforced in our professional development offerings, to ensure claimants receive timely access to specialist help.”

When complaints come in

Curtis says AFCA has its own steps to support people experiencing vulnerability.

“We aim to prioritise complainants experiencing vulnerability and adjust our services based on the individual needs of consumers who have lodged a complaint with us,” she says.

“When complaints are lodged with AFCA, we monitor for key terms in online or emailed complaint submissions that may indicate vulnerability.

‘We listen out for the same signs if the initial contact from the customer is via telephone, and we continue to ‘check in’ with complainants in case their circumstances change.

“We tailor our communication to suit the complainant and will work with them or their representative to ensure they have equitable access to our services. We will arrange interpreters and other supports where necessary.”

Suggested tools

Stevens says insurers are increasingly using practical tools such as guided scripts, customer relationship management flags, checklists and training modules to help frontline staff recognise and respond to vulnerability with consistency and care.

To protect staff and the privacy rights of the customer, she believes all front-line staff should be trained on how to document to the customer their disclosure of their circumstance that may make them vulnerable, for example by employing the TEXAS model of documentation.

Meanwhile, Curtis says insurers should ensure that the trades and representatives who are engaging with their customers are also trained to identify and respond to signs of vulnerability.

“These frontline people can help make the customer’s experience a positive one by how they respond to the customer’s individual circumstances,” she says.

Courses and short programs

Shanks says ANZIIF offers specialised courses and short programs, as well as practical templates and case studies designed to upskill insurance professionals in identifying and supporting vulnerable customers (see below).

“As an organisation, we engage regularly with regulators such as the Australian Securities and Investments Commission (ASIC) and industry bodies such as the Insurance Council of Australia (ICA) to ensure our courses reflect current requirements,” she says.

“ANZIIF’s suite of programs covers everything from basic customer service to advanced case management, supporting organisations to not only meet, but exceed, compliance standards.”

Regulatory and industry guidance

Shanks says the duties of insurers are built into the various industry codes. In addition, ASIC has guidelines and expectations regarding vulnerability.

The key guidance in Australia includes the General Insurance Code of Practice (2020): Obligations under Part 9 (supporting customers experiencing vulnerability); ASIC Regulatory Guide 271 on Internal Dispute Resolution (heightened expectations on dealing with vulnerable complainants) and ICA’s domestic and family violence guidelines.

Stevens says key resources in New Zealand include the Financial Markets Authority’s 2021 guidance “Customer vulnerability – our expectations for providers” and the Insurance Council of New Zealand’s (ICNZ) best practice guidelines for prioritising vulnerable customers.

In addition, she says the IFSO Scheme provides a strong foundation for best practice in this area through webinars for its participants while the ICNZ’s 2020 Fair Insurance Code encourages good conduct and professionalism in the insurance industry.

Stevens says the emphasis in these guidance materials is on focusing on a person’s needs and recognising vulnerability as situational rather than categorical.

“Descriptions like ‘clients in vulnerable circumstances’ are preferred over labels such as ‘vulnerable individuals’, which can be stigmatising,” she says.

In South-East Asia, insurers can look to the Monetary Authority of Singapore’s Fair Dealing Guidelines and Bank Negara Malaysia’s Policy Document on Fair Treatment of Financial Consumers for direction.

Elsewhere, both Indonesia and Thailand have prioritised financial inclusion and consumer protection in their insurance regulatory frameworks in recent years.

This topic will be explored by a panel at the upcoming AICLA/ANZIIF Claims Convention.

  Find out more

ANZIIF’s specialised courses and short programs:

• Creating Good Outcomes for Customers Experiencing Vulnerabilities: Interactive learning modules for practical scenarios.
• Empathetic Claims Management Short Course: Focuses on compassion and client-centered support
• Regular webinars and thought-leadership sessions on topics like domestic violence, mental health, and legislative updates
• Skills units aligned to regulatory and industry codes: e.g. modules on Ethics, Customer Care, and Claims Handling