Insurance giant Allianz is under fire after it admitted to misleading customers over travel insurance policy coverage.
A Royal Commission inquiry into the insurance industry heard that Allianz had sold travel insurance that promised unlimited emergency medical cover when the cover actually had a $1,000 limit.
The policies also promised cover wherever travellers were, when there were in fact restrictions on locations.
According to Reuters, under questioning, Allianz retail distribution general manager Michael Winter said Allianz had misled customers who bought insurance products through its websites.
Between December 2015 and June 2018, when the insurer rectified the false claims, Allianz said it had sold over 2 million travel insurance policies including around 10% through direct sales.
Making matters worse for the insurer, documents show that Allianz ignored lawyers’ advice to spend up to $30,000 on reviewing its website well before it did so.
“This is demonstrative, I want to put to you, of Allianz not prioritising compliance, and compliance with the law," said Rowena Orr, a lawyer at the inquiry.
"At Allianz, it's more important to protect the bottom line than to stop misleading your customers.”
In agreeing with the statement, Mr Winter said he didn’t think “it's more important to protect the bottom line”.
“I think it should absolutely be more important to protect the customer," he said.
Allianz has not yet contacted affected customers about any remediation.
The inquiry into the insurance industry found other wrongdoing in the consumer credit and small business banking sectors.
It will also explore whether the insurance industry's mostly self-regulatory system should continue.
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