According to ASIC, QBE employed a pricing model that resulted in customers receiving lower discounts than those advertised. This practice affected a broad spectrum of policyholders, including retirees, loyal customers, shareholders, and individuals holding multiple or claim-free policies. The regulator contends that such discrepancies not only breach consumer trust but also contravene legal standards designed to ensure transparency in the insurance sector.
In response to these allegations, QBE's shares experienced a decline of up to 1.1%, reflecting investor concerns over potential financial and reputational repercussions. The insurer has acknowledged the issue, stating that it self-reported the discrepancies to ASIC in October 2022 and has since undertaken corrective measures following an external review of its pricing practices.
This legal action underscores ASIC's commitment to enforcing compliance within the insurance industry, particularly concerning pricing and claims handling. It follows a similar lawsuit filed by ASIC in 2023 against Insurance Australia Group (IAG) over misleading loyalty discounts, highlighting a broader regulatory focus on ensuring that insurers uphold their obligations to consumers.
For policyholders, this case serves as a reminder of the importance of scrutinising renewal notices and understanding the specifics of any discounts applied. It also emphasises the need for insurers to maintain robust systems and controls to ensure that customers receive the benefits they are promised.
As the legal proceedings unfold, the outcome will likely have significant implications for industry practices and consumer confidence in the Australian insurance market.
