ASIC has launched court proceedings against QBE Insurance, alleging the company misled half a million customers over a five-year period about the value of insurance discounts.
Between July 2017 and September 2022, QBE sent renewal notices promising discounts on premiums for a range of general insurance products, including home, contents and car insurance.
More than 500,000 renewal notices offering the discount were sent to retirees, loyalty customers, QBE shareholders, those holding multiple QBE policies, and those holding QBE policies who had made no claims.
However, the insurer’s “pricing model potentially eroded the discounts received by over half a million customers, in some cases to nil,” ASIC deputy chair Sarah Court alleges.
“Some customers were promised discounts for their loyalty when renewing their policies, which they didn’t receive.”
Statements offering pricing discounts were also made in various product disclosure statements published on QBE’s website.
“The failure by insurers to deliver on pricing promises is a key priority for ASIC and we will continue to take action to hold insurers to account,” the Court continues.
“Where insurers make discount promises to renewing customers, they need to have robust systems and controls in place to make sure their customers receive the discounts they were promised.”
QBE self-reported the failures to ASIC in October 2022, and said in an ASX statement it had already “taken steps to address the inconsistencies” – having paid back $73 million to 487,000.
“The proceedings relate to previously reported inconsistencies in the delivery of price promises made to customers,” the ASX note reads.
“Following an external review of its pricing practices in 2022, QBE has taken steps to address the inconsistencies, reported the issues to ASIC and has co-operated with ASIC’s investigation which has culminated in today’s development.”
Insurance firms offering false discounts are in the cross hairs of ASIC.
In June 2023, ASIC released a report that “outlines a range of pricing failures identified by general insurers after an ASIC-initiated review of pricing practices.”
Between January 2018 and the time of the report’s release, ASIC had forced general insurers to remediate over $815 million to more than 5.6 million customers for pricing failures.
This article was originally published by Mumbrella on 24th October 2024. View original.
