The corporate regulator is suing Australia’s largest insurer for allegedly misleading customers by making false promises on discounts it offered to customers over five years.
The Australian Securities and Investments Commission on Wednesday morning said it would take QBE Insurance to court for potentially “eroding” the discounts received by more than 500,000 customers for its car, home and general insurance products between 2017 and 2022.
QBE chairman Mike Wilkins: The corporate regulator is taking the insurer to court over claims it didn’t give discounts it had promised to customers.Credit: Louise Kennerley
ASIC deputy chair Sarah Court said the discounts were offered though renewal notices to retirees, QBE shareholders and policyholders.
“Some customers were promised discounts for their loyalty when renewing their policies, which they didn’t receive,” Court said.
“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.”
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ASIC has alleged QBE’s pricing model involved imposing a minimum premium to ensure it was at or above the lowest retail premium the insurer was prepared to accept from a customer, and using an algorithm at the insurance renewal process to limit the discount.
The regulator said customers potentially missed out on the full value of the discount promised by QBE.
In a statement to the ASX, QBE Insurance said following an external review in 2022 into its pricing mechanism, it had identified “inconsistencies”, reported the matter to ASIC and cooperated with the investigation.
