IAG faces class action lawsuit over discounts

Slater and Gordon has filed a class action against Insurance Australia Group (IAG). The statement of claim, according to the legal firm’s media release, accuses three IAG brands “of engaging in misleading, deceptive and unconscionable conduct.”

The giant insurer has announced it intends to defend the proceedings.

“We’re alleging that millions of Australians paid premiums year-on-year to these IAG insurers on the promise that they were getting a discount,” said Ben Hardwick (pictured above), the legal firm’s class actions practice group leader. “But in reality, because of this pricing algorithm they were using, new customers were typically paying less for their policies than loyal customers who had been with them for more than 20 years,”

The release said the class action claims the insurers’ conduct went against financial services laws “and that they knew or ought to have known that their conduct was not in customers’ financial interests.”

The release also quoted plaintiffs involved in the action.

“I thought I was getting a good deal,” said lead plaintiff Angela Williams. “If I had known that RACV was actually charging me a higher base premium because of a pricing algorithm, I would have switched right away.”

The Slater and Gordon release said the action concerns millions of IAG customers with home and contents policies through its RACV, SGIO and SGIC brands.

The IAG release said the class action “relates to allegations which are the subject of the proceedings commenced by the Australian Securities and Investments Commission (ASIC) against IAL and IMA in August 2023 in the Federal Court of Australia.”

The insurer is defending the ASIC proceedings.

“IAL and IMA maintain they have delivered on loyalty promises made to customers and do not agree that they have misled customers about the extent of the discounts they would receive,” said the insurer’s release.