Allianz Australia Insurance and AWP fined $16.8 million for false or misleading statements

The Supreme Court of NSW has convicted and imposed criminal fines of AU$13.5 million against Allianz Australia Insurance and $3.3 million against AWP Australia Pty for making false or misleading statements. AWP marketed, sold and managed various travel insurance products on behalf of Allianz, the insurer and underwriter. Both Allianz and AWP distributed travel insurance through partners which included airlines, financial institutions, credit card issuers, and travel agencies.

Allianz Australia Insurance was sentenced for six counts of disseminating information that was false or misleading and AWP was sentenced for one count of disseminating misleading information, contrary to the Corporations Act.

The Court found that between 2016 and 2018, Allianz and AWP published information online, including on Allianz’s domestic and international travel insurance web pages, that misrepresented the characteristics or level of coverage of its travel insurance available to consumers.

The Allianz website advertised the maximum travel insurance benefits payable to consumers but sometimes failed to state that sub-limits, terms, conditions or exclusions would limit those benefits.

ASIC Deputy Chair Sarah Court said: “Today’s ruling highlights the critical need for the insurance industry to be transparent and accurate when selling and promoting their products.

“We pursued this case as part of ASIC’s consumer protection focus on misleading statements in the sale of insurance products.

“ASIC was concerned that thousands of customers were exposed to the risk that they might obtain insurance that they believed offered far more cover than they believed it did.”

In handing down his decision, Justice Rothman said: “It is important that corporations take the steps at the highest level to ensure that proper processes are in place which prevent breaches of this kind.”

Allianz and AWP will also pay ASIC’s investigation costs.

Peter Klemt, CEO of PassportCard Australia, recently spoke to ITIJ about the evolving Australian market, post-pandemic recovery, and digital innovation.