Insurance Aggregators

I seek leave to make a brief explanation before asking the Minister for Consumer Affairs a question about insurance aggregators.

The Hon. J.M.A. LENSINK: There are a number of insurance aggregators available to prepare quotes for annual policies, with one well-known one being iSelect for health insurance and another being RateCity, which I understand is operated by ninemsn and Cannex.

We have had some complaints to our office, and we did our own testing very recently by creating a couple of hypothetical customers. One was a 65 year old female living at Glenunga seeking comprehensive insurance for a 2007 Holden wagon. RateCity priced SGIC at $569.29 per annum. However, when clicking through to the SGIC site, the quote came in at $347.84, which is $221.45, or nearly 40 per cent, less.

Another quote was sought for a 25 year old male at Newton. RateCity priced a quote from Budget Direct at $509.03, whereas the direct quote from Budget Direct came in at $700, which is $191, or nearly 40 per cent, more. I am advised that the methodology used by aggregators to create their pricing is through a once per month survey using a fairly small sample size. My question to the minister is: has the office of consumer affairs issued any notifications to consumers in relation to the inaccuracy of these websites and, if not, why not?

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (14:29): I thank the honourable member for her important question. To the best of my knowledge, I am not aware that I have received any complaints in my office about these matters. Officers may have dealt with them and may have been dealing with the agency directly. That could have happened but, to the best of my knowledge, I am not aware of any complaints recently.

I am happy to look at the information that the honourable member has presented here today and have that investigated. The honourable member knows that our agency and officers are very responsive and responsible and, if she or any of her constituents have any concerns, all they need do is contact our office and we always respond in a very timely and responsible way. She has chosen not to do that today so I am not aware of the particular examples that she has given. As I said, I am happy to take that on notice, have it investigated and bring back a response.

Wednesday 23 September 2009

In reply to the Hon. J.M.A. LENSINK (12 May 2009).

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy): I am advised:

The provision of insurance services by Insurance companies is regulated by the Australian Securities and Investment Commission (ASIC). Insurance aggregators are relatively new entrants to the insurance industry and ASIC are keen to hear of any practice that appears to be deceptive or misleading.

Where such matters come to the attention of OCBA, my officers will refer these to ASIC where appropriate. I have also written to the Commonwealth Minister for Competition Policy and Consumer Affairs to draw his attention to this matter.

With respect to whether I would issue any public warning or notification, this would best be undertaken by ASIC as they are the regulator and would be the agency gathering complaint information on this alleged practice. As more consumers begin to rely on the internet for information, I have suggested that if ASIC had evidence of misleading practices that consideration be given to issuing a warning.

I am advised that no formal complaint has been lodged with the Office of Consumer and Business Affairs (OCBA) against an aggregator.