Mounting Claims Lift Nrma Rates
Sydney Morning Herald
Saturday February 5, 2000
Australia's largest insurer, NRMA Insurance, has lifted premiums on car and home building and contents insurance by between 2 and 5 per cent ahead of its proposed demutualisation and public float scheduled for mid-year.
The largest rise is more than double the present inflation rate.
The increases, which an NRMA spokesman said were the first for 12 months, have begun to filter through on policy renewals and apply to new policies.
The higher premiums 2 per cent for comprehensive vehicle cover and 5 per cent for home building and contents in NSW are on top of GST adjustments which have already been built into policies to reflect that tax on insurance cover extending beyond July 1.
An NRMA spokesman put the higher premiums down to higher claims costs, reflecting increased NSW collision rates and higher payouts on burglaries, despite a 10 per cent drop in the number of break-ins.
The NRMA's current premium on a 3.8 litre $35,000 Holden Commodore garaged in the inner city is $1,947. A 60 per cent no-claim bonus reduces the premium to $779.
NRMA says there has been a 71 per cent increase in the cost of burglary payouts in the past two years due to the higher value of goods taken.
The latest increases were attacked yesterday by rebel NRMA Ltd director Mr Richard Talbot for being unnecessary. Mr Talbot was kicked off the insurance board last December.
``NRMA Insurance should charge its members mutually priced insurance, not commercially priced insurance. NRMA insurance was formed in 1925 to provide members with the lowest possible premiums remembering that any surplus profits would be used to further reduce premiums," Mr Talbot said yesterday.
NRMA is not part of an Australian Competition and Consumer Commission investigation into GST-related premium rises.
A spokeswoman for AMP General and GIO Australia said premiums for car and house insurances had not been increased since July last year.
A spokesman for QBE Mercantile General said the company had increased premiums but because it dealt with brokers the size of the increases varied depending on the broker's claims record.
A spokesman for Sun Alliance said he was unable to get information on premium increases because of the complex nature of the company's insurance portfolio.
© 2000 Sydney Morning Herald
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