TIO earns millions while crying poor

By ERWIN CHLANDA

The global firm Allianz, the proprietor of the Territory Insurance Office, has hiked by 40% the home owner premium for a client in The Centre while the Australian part of the company boosted its second quarter profit by more than six-fold over last year.

But Nicholas Scofield, Chief Corporate Affairs Officer of Allianz Insurance told the Alice Springs rural area resident: “The main reason for the increase is due to the expiry of a period of premium discounting.”

Perhaps to make customers less irate to be forking out, he lists a string of his company’s achievements, including being “a proud sponsor of the Australian Paralympic Committee”. The image at the top appears on the company’s website.

Says Mr Scofield: “All insurers have been forced to substantially increase home insurance premiums over recent years.

“This has been caused by significant building cost inflation driven by increased prices for building materials and building trades, as well as inflationary increases for other goods and services used in building repairs.”

But Insurance News reports that the general insurance business of Allianz in Australia in the second quarter recorded stronger results, lifted by higher renewal rates and a drop in claim-related losses.

“The business made an operating profit of $275m in the June quarter, compared with $43m a year earlier.

“Insurance revenue grew to $1.9 billion from $1.65 billion and the combined operating ratio improved to 87.8% from 98.4%.

“Total business volume surged 13% to $2.5 billion and Allianz says Australian renewal rates increased 10.6% in the six months to June,” reports Insurance News.

Mr Scofield writes to the client: “When large premium increases for particular policies are warranted, Allianz will at times cap the premium increase to reduce the impact on our policyholder.

“As a result, your last year’s premium reflected a period on cumulative discounts that have unfortunately now expired."

He gives no clue about the formula the company used to calculate this "unfortunate" expiry.

“I acknowledge the above factors have resulted in a large increase in the premium for your building cover and that you may be disappointed with this outcome.”

Below his signature Mr Scofield list a string of his company’s achievements, acknowledged by several institutions, including being Employer of Choice for Gender Equality 2014 to 2016; Employer of Choice for Women 2009 to 2013; Workplace Gender Equality Agency citation and Equal Opportunity for Women in the Workplace Agency citation.

UPDATE September 4, 4pm: Tom Abourizk, head of policy at Choice, commenting on the Newsreport of August 30, says: "I am still extremely skeptical that any insurer would have been setting premiums at a 'discounted' rate at which they were expecting to make a loss on, particularly for multiple years."