Two major Australian insurers will refund customers a total of $62.8 million in add-on premiums following an ASIC investigation.
An investigation by the Australian Securities and Investments Commission (ASIC) has found that thousands of customers are entitled to refunds after insurance providers Suncorp and Allianz Australia Insurance sold add-on insurance through car dealerships that were of “little or no value”.
As a result of the findings, Allianz will be required to pay a total of $45.6 million to 68,000 customers following concerns over products sold to customers by the insurer from 1 December 2010 to 30 November 2017.
Suncorp will also be required to refund 41,428 customers a total of $17.2 million after selling add-on insurance premiums through its subsidiary MTA Insurance between 2008 and 2017, which ASIC also deemed of “little or no value” to customers.
ASIC found that refunds were due when sales of Allianz and MTA Insurance products:
In response to ASIC’s findings, Allianz will:
Further, MTA Insurance will be required to:
ASIC acting chairman Peter Kell urged insurers to take “active steps” in ensuring that customer are sold appropriate insurance products.
“Add-on insurance has been under the spotlight for some time now. Insurers should be taking active steps to ensure their customers are not being sold products that provide little or no value,” the chairman said.
“ASIC’s work on add-on insurance is all about making sure customers are being sold insurance that meets their needs and, if they haven’t, are appropriately remediated.”
Mr Kell also noted that ASIC’s investigation into mis-sold insurance products was “one of the largest compensation programs” undertaken by the watchdog.
The chairman said: “The refunds offered by Allianz, together with those from other insurers, make up one of the largest compensation programs achieved by ASIC, with over $120 million in refunds to consumers as a result of ASIC shining a spotlight on these poor consumer outcomes.
“Our message to insurers is simple: The needs of your customers must come first in the design, price and sale of your products.”
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