ASIC releases new report, calling on general insurers to remove pricing complexity

ASIC is calling on all general insurers to remove unnecessary pricing complexity and fix their systems, practices and controls so they can deliver on the pricing promises they make to their customers. 

In a new report, ‘When the price is not right: Making good on insurance pricing promises’, ASIC reveals that ongoing pricing failures will see general insurers repay $815 million to more than 5.6 million consumers.  

“This systemic failure by insurers to deliver on their pricing promises has seen more than 5.6 million consumers overcharged $815 million for their insurance,” said ASIC Deputy Chair Karen Chester. 

The report also finds: 

• general insurers did not have adequate product governance, systems, data and controls in place to deliver on their pricing promises; 
• pricing promises and pricing practices were unnecessarily complex; and 
• insurers did not always have adequate oversight and controls over the pricing promises made or delivered by the distributors of their products. 

Deputy Chair Karen Chester said, “ASIC’s report reveals three main causes for the systemic pricing failures. First, unnecessary complexity in pricing promises and pricing practices—accounting for the lion’s share (at least $379 million) of the remediation. Second, persistent underinvestment in systems, controls and data. Third, and perhaps the most disappointing, insurers’ inaction despite being on notice for years about these pricing risks.” 

You can read the full report on ASIC’s website here.