Suncorp was ordered to scrap a 60% home insurance hike it could not justify

In a June 2024 determination reported by ABC News that October, the Australian Financial Complaints Authority ordered Suncorp's AAI Limited to drop a 60% increase in a customer's home insurance premium. The customer said the risk factors for the property had not changed. Suncorp said the property was rated 'very high' for bushfire and hail, and cited a higher NSW Fire Services Levy, though that rise was 0.6%.

AFCA said the insurer failed to 'provide any persuasive evidence to show how the risk assessment details have changed' or a 'reasonable explanation', and ordered the price reduced to the average premium rises from the 2020 renewal. Suncorp would not say which brand was involved. It said premiums were assessed on the property's risk, and it did not answer questions about a second AAMI customer, retiree Tom Taylor, whose premium rose almost 55% with no explanation.

Former ACCC chair Allan Fels said it looked like price gouging an individual customer. The ruling came as complaints about general insurers to AFCA hit record highs, up more than 80% since 2018, with over 29,000 in the latest financial year, fewer than 4% about premium increases.

The insurer cited generic risk ratings that did not show any change since the prior renewal.

The levy increase it pointed to was 0.6%, far too small to explain a 60% rise.

Premium-setting is a business decision, and ASIC said it expected pricing to be easily understood by consumers.

If you cannot show how a customer's own risk changed, a large renewal rise looks like opportunistic pricing. Ombudsmen will test the evidence and can order reductions.

Consumer advocates urged more customers to take insurers to the ombudsman and called for a national home insurance comparison site, which the ACCC had recommended. Financial Counselling Australia asked ASIC to investigate; ASIC said premium-setting was a business decision but that it expected honest and fair practices. Suncorp's full-year net profit was up 12% to $1.2 billion. The report covers an individual determination and does not show how many customers were affected.