Insurance giant QBE has been taken to court by the ASIC over allegations that it misled more than 500,000 customers by failing to honour promised price discounts for at least five years.
In filings lodged by the regulator, QBE is said to have advertised insurance discounts to various customer groups, including retirees and policyholders with no claims or with multiple policies, but failed to deliver on these promises due to internal pricing mechanisms.
ASIC alleges that QBE's 'Minimum Premium Mechanism' and 'Cupping Mechanism' effectively reduced or nullified these discounts, despite marketing materials claiming otherwise.
ASIC deputy chair Sarah Court said, "QBE knew that some of these pricing mechanisms were applying so that consumers were not getting the full discounts promised." She emphasised the harm caused to the competitive insurance market and customers.
QBE acknowledged the proceedings, stating it had reported pricing inconsistencies to ASIC in 2022 and initiated a remediation program, repaying A$105 million to affected customers. "QBE apologises for the inconsistencies," the company said, adding that it continues to work with the regulator.
This legal action follows similar cases against rival insurers IAG (LON:ICAG) and IMA, with IAG fined $40 million for discount failures on NRMA policies.
ASIC's ongoing review found that 11 insurers, including Suncorp and Allianz (ETR:ALVG), also failed to deliver promised discounts.