The country’s largest insurer is being taken to court over accusations it misled and deceived loyal customers who were promised discounts – but were in fact, paying higher premiums.
Slater and Gordon has filed a class action in the Victorian Supreme Court on behalf of millions of customers against NRMA, whose parent company is Insurance Australia Group (IAG).
The firm’s class action practice group leader Ben Hardwick accused NRMA of using a pricing algorithm to identify which consumers were least likely to switch to a different insurer in response to price hikes, before increasing their premiums.
A class action has accused NRMA of misleading and deceiving loyal customers to hike up their premiums.
“The reality is that they are likely to have received cheaper insurance from these brands, had their loyalty not been a factor in their renewal calculations at all,” Hardwick said.
“We consider that this conduct may amount to misleading and deceptive conduct and unconscionable conduct, in breach of the [Australian Securities and Investments Commission] ASIC Act.”
In a statement, IAG said it would defend the proceedings.
“Insurance Australia Limited and Insurance Manufacturers of Australia [both subsidiaries of IAG] maintain they have delivered on loyalty offers made to customers and do not agree that they have misled customers about the extent of discounts they would receive,” IAG said.
The latest legal proceedings follow another class action, also by Slater and Gordon, against IAG’s other brands, RACV, SGIO and SGIC, over similar allegations after ASIC last year accused the insurance giant of misleading and deceptive conduct.
The corporate regulator in October also launched Federal Court action against QBE over a similar issue.
