Allianz Australia enters strategic partnership with the Royal Automobile Association of South Australia
Allianz purchases general insurance business of RAA, expanding its consumer insurance presence in South Australia.
20-year exclusive distribution agreement for the General Insurance product lines1 of RAA.
Transaction worth gross AUD$642 million (including excess capital and subject to completion adjustments) and expected to complete in mid-2025.
Allianz Australia is excited to announce it has entered into a partnership with the Royal Automobile Association of South Australia Incorporated (RAA). The partnership, worth AUD$6422 million, includes the purchase of its general insurance business and a 20-year exclusive distribution agreement for the Home and Motor insurance product lines of RAA.
Within this partnership, Allianz will underwrite all General Insurance products (excluding travel), and manage claims, under the RAA brand. Allianz will also welcome approximately 270 RAA employees, who will transfer to join the local Allianz Adelaide team, under the proposed acquisition. As a leading global insurance brand3, with over 100 years’ experience in Australia, Allianz will bring both global and local expertise to support RAA’s 825,000 members.
Allianz Managing Director, Richard Feledy, said: “We are thrilled to announce our partnership with RAA, South Australia’s leading insurer and a beloved and respected brand. Both RAA and Allianz have a rich history of supporting Australian’s for over 100 years.
Our commitment to delivering exceptional value, and caring for our customers and members, is at the heart of this collaboration. We were strongly drawn to partner with RAA due to their compelling strategy and platform for growth, the underlying quality of the business, and the relative stability and profitability of the insurance market in South Australia.
There is also a strong cultural and strategic alignment that is already evident between our organisations, and we look forward to welcoming the RAA team to Allianz.”
RAA Chief Executive Officer, Nick Reade, said: “We are pleased to enter into this agreement with Allianz. As the world’s number one insurance brand we are confident Allianz’s global insurance expertise and scale will greatly benefit our 825,000 members.”
Both companies will go through a process of consulting with key stakeholders and will obtain all relevant regulatory approvals.
Subject to regulatory approvals and other conditions, it is expected the transaction will complete mid 2025.
Allianz Australia fined $1.5M over misleading travel Insurance sales via Expedia-Owned Sites
The Federal Court of Australia imposed the penalties after finding Allianz and AWP engaged in misleading and deceptive conduct when selling travel insurance by failing to correctly state how premiums were calculated and by allowing insurance to be sold to ineligible customers.
The Court also found Allianz failed to correctly disclose how premiums were calculated in product disclosure statements so that consumers were not given accurate information on the travel insurance they were purchasing.
Furthermore, Allianz and AWP failed to prevent the sale of insurance on Expedia websites to consumers who were ineligible to make claims under the policies, and failed to prevent the websites from misusing a quote from the Department of Foreign Affairs and Trade about the importance of purchasing travel insurance.
The three Expedia-owned websites involved were www.expedia.com.au, www.lastminute.com.au and www.wotif.com.au.
The case was brought before the Court in September last year by the Australian Securities & Investments Commission (ASIC).
Sarah Court, deputy chair of ASIC, said: “The community expects that the insurance industry will promote and sell products in a transparent way. People take out travel insurance for peace of mind and to protect their families.
“The value of an insurance policy is in the promise – that a consumer can feel confident and secure that they will be looked after if something goes wrong. ASIC remains committed to ensuring that consumers’ experience matches that.”
In his decision, Chief Justice Allsop said the proposed penalties “fall within the appropriate range to deter Allianz and AWP from engaging in similar conduct in the future, and to deter the sector more generally from adopting a lax attitude towards compliance”.
The Court acknowledged Allianz and AWP’s efforts to make early admissions of liability and took this, and other relevant considerations, into account in determining penalty.
AWP was ordered to pay $1.14 million and Allianz $360,000. Both parties have also been ordered to pay ASIC’s court costs.
In a statement to Travel Weekly, a spokesperson for Allianz and AWP said both parties “cooperated fully with ASIC to resolve these proceedings expeditiously, including by making admissions and not contesting the penalty sought by ASIC”.
“In 2018, Allianz and AWP self-reported the matters the subject of these proceedings to ASIC. Allianz and AWP worked with ASIC on a remediation package and previously paid 15,965 customers an amount totalling approximately $1,140,000 in remediation,” the statement read.
“Allianz and AWP welcome the finalisation of this matter.”
Source: www.travelweekly.com.au