Suncorp Becomes First Thatcham Research ‘Global Associate’

Thatcham Research has announced the renewal of its contract with Suncorp, extending the successful collaboration that has seen Suncorp distribute Thatcham Research repair data in Australia and New Zealand since 2013.

Under the renewed agreement, Suncorp will become the first ever Thatcham Research Global Associate, providing Suncorp with access to Thatcham Research’s large vehicle research, data and services.

“We are delighted to welcome Suncorp as our first ever Global Associate member, building on the successful partnership we have enjoyed over the last five years,” said Neale Phillips, Global Product Director, Thatcham Research. “We are committed to supporting its needs and those of its repair network – starting with an upgrade to escribe which will shortly see the inclusion of vehicle manufacturer methods, to further increase vehicle coverage.”

Thatcham’s online portal escribe provides insurance assessors and repairers with instant access to the latest multi-franchised Thatcham Research crash repair methods, times and technical newsletters.

“Thatcham repair data helps to ensure that our customer’s vehicles are repaired in the most safe and efficient manner, so the decision to extend and strengthen our relationship with such a respected industry body was an easy one and aligns 100 per cent with Suncorp’s overarching repair strategy,” said Brett Wallace, EM Assessing & Repair Performance, Suncorp.

Insurers Reject Royal Commission Claims Of Misconduct

Some of Australia’s leading general insurers have rejected allegations of misconduct following examination of their behaviour during the Hayne royal commission’s sixth round of hearings.

Suncorp-owned AAI, which offers insurance under several brands including AAMI, denied the suggestion it had sold misleading policies, while Allianz rejected the commission’s findings of poor culture affecting compliance.

Insurance Australia Group accepted it engaged in conduct that fell below community standards but rejected counsel assisting’s findings that its behaviour constituted misconduct.

Youi also rejected claims made against it, saying counsel assisting Rowena Orr QC failed to prove the case studies were attributable to its particular cultural and governance practices. The company said council assisting sought to portray Youi in the worst possible light and urged the commissioner to reject the findings.

The Australian Securities and Investments Commission, under fire for failing to take appropriate action against insurers over issues raised during the hearings, said politicians are to blame.

“The insurance sector has been exempted from a range of laws which have seen ASIC’s ability to review the sector severely limited,” ASIC senior executive and former long-time head of the regulator’s insurance team, Greg Kirk, told the Australian Financial Review.”

Federal Treasurer, Josh Frydenberg, said he would look to introduce remediation power to help improve compensation outcomes for affected customers.

Insurers Under Fire At Hayne Royal Commission

General insurers have come under fire during the Hayne Royal Commission, which finished its examinations last Friday.

The commission heard insurers Allianz and IAG may have engaged in misconduct, while the Insurance Council of Australia (ICA) was criticised for failing to act against members that breached the insurance code of practice.

In relation to Allianz, Counsel Assisting Rowena Orr said the commission is open to find the company engaged in misconduct via misleading statements published on its website. The failure to report that misleading and deceptive conduct to ASIC and to have a compliance system in place could also amount to misconduct.

Orr said Allianz’s behaviour, which included seeking to manipulate independent reports, fell below community standards, adding that monitoring and supervision remains an issue for the company. According to Orr, Allianz’s culture fails to consider risk and compliance a priority, while the company responds defensively when challenged.

Swann Insurance also came under fire when Counsel Assisting Mark Costello suggested the commission could find the company engaged in misconduct by giving incentives to authorised representatives (ARs) to sell as many add-on policies as possible with no regard to the suitability of those products. Costello also told the commission that parent company IAG failed to properly oversee Swann.

Regarding the ICA, Orr told the commission the council had not applied any sanctions despite the code governance committee determining there were 33 breaches and around 31,000 incidents of self-reporting since July 2014.

In response, ICA CEO Rob Whelan said the council only applied sanctions when breaches are not remedied, resolved or corrected.

While acknowledging its limitations, Whelan told the commission the ICA believes in self-regulation and that the code should not form part of consumer contracts.

A report containing questions arising will be published on Friday 28 September, with the parties involved able to respond by October 1.

Will Suncorp Sell Capital S.M.A.R.T?

Suncorp is reportedly seeking a buyer for its majority shareholding in Capital S.M.A.R.T Repairs, which is believed to be worth more than $300 million.

The group owns 95 per cent of Capital S.M.A.R.T, with the balance owned by its founder Jim Vais.

According to Suncorp, Capital S.M.A.R.T handles 45 per cent of its motor vehicle repairs.

Capital S.M.A.R.T reported $290 million in revenue for the 2016-2017 financial year, an increase of $47 million over the previous 12 months. The company also reported a net profit of $14.1 million and assets of $61.6 million. It operates 45 sites across Australia and New Zealand and has an estimated 4.3 per cent of the Australian collision repair market.

Suncorp Simplifies Quoting For Non-Recommended Repairers

Suncorp has launched a new online portal to simplify quoting by non-recommended repairers (NRR).

Executive Manager, Assessing and Repair at Suncorp, Brett Wallace, said the new AudaBridge portal provides opportunities for a more robust and consistent approach to NRR assessments.

“We currently receive quotes through various channels and formats, some of which require us to manually input the information into our system. This is time consuming and often means our assessors don’t have all the details needed to properly compare repair method, quality and costs,” said Wallace.

“The new web-based platform will give repairers access to relevant claim information, enable them to upload or input quotes, view real-time assessment information and submit invoices. These enhancements will help our team deliver a better customer experience, and ultimately provide the best repair solution for each vehicle. The method repairers currently use to construct quotes won’t change and Suncorp will continue to accept all estimate formats,” he added.

“We remain committed to working closely with NRRs to create a seamless process focused on delivering the highest quality repairs, best service and the greatest value for our customers.”

Repairers can register to use the AudaBridge portal by emailing [email protected].

Suncorp Chairman Switkowski Set To Retire

Christine McLoughlin is to replace Suncorp chairman Ziggy Switkowski who is retiring from the board of the company in September.

Ms McLoughlin is currently the chairman of Suncorp’s remuneration committee, and was the inaugural chairman of the Australian Payments Council, and is also a director of health insurer nib.

On the appointm,ent of his successor, Dr Switkowski said: “In her three years on the board, Christine has demonstrated a broad range of skills relevant to financial services. I am confident that Christine will work well with the board, the CEO and managing director Michael Cameron, and senior management team to take this company to the next level of performance.”

McLoughlin said she was looking to embrace new opportunities and challenges.

“I look forward to working with my fellow directors and the Suncorp management team to continue to shape the Suncorp of tomorrow for our shareholders, customers and communities,” she said.

Allianz, Suncorp Refund $62.8 Million In Add-On Insurance Premiums

Allianz will refund $45.6 million to 68,000 customers and Suncorp will refund $17.2 million to 41,428 MTA Insurance customers for add-on policies, both of which were bought through car dealerships that provided little or no value to consumers.

The Australian Securities and Investments Commission said it had a number of concerns about the design and sale of a range of Allianz add-on insurance products sold through car dealerships across Australia between 1 December 2010 and 30 November 2017. The Allianz refund programme will cover four Allianz add-on insurance products sold between the seven-year period. These were Motor Equity Insurance, a Guaranteed Asset Protection (GAP) insurance that pays the difference between the amount owed on a car loan and the amount the car is insured for if written off; Loan Protection Insurance (LPI), a form of consumer credit insurance; tyre and rim insurance; and extended warranties.

ASIC expressed several concerns with these products, including the unlikelihood customers could claim on their GAP policies because of these policies’ design, as well as customers being over-insured or not needing the policies they were sold. Life cover (under LPI) was sold to young people who were unlikely to need it, while customers were sold extended warranties they were unlikely to need because it might have been up to seven years before they could make a claim (as the car had a manufacturer’s warranty for that period).

MTA Insurance was pinged over its own GAP insurance policy offered to dealership customers between 2009 and 2017. Like Allianz, ASIC found it unlikely that the customer could claim on the insurance, because they may have paid a large deposit on the car loan so that the insured value of the car was more than the amount borrowed. ASIC also noted that the GAP policy cover was unnecessary as it duplicated replacement vehicle cover held by customers under their comprehensive car insurance policies, while customers were often sold a more expensive level of cover than they needed. Finally, many customers did not receive rebates under their GAP policies when they paid out their loan early, even though cover under those policies had ended.

Both companies will offer rebates as well as partial or full refunds depending on the policies customers held. Allianz will also make a community benefit payment of $175,000 to a financial literacy organisation, while MTA Insurance will make a similar payment of $50,000.

“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,” said Acting ASIC Chair Peter Kell.

“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.

“Our message to insurers is simple: the needs of your customers must come first in the design, price and sale of your products.”

ASIC said it acknowledged Allianz’ cooperation and Suncorp’s engagement in both matters.