Slater & Gordon says it is weighing the merits of a pricing misconduct class action against Suncorp after its investigations found customers may have been misled about how premiums were set.

The law firm examined purchases of home and motor products under the brands Suncorp, AAMI, GIO and Apia.

“Our investigation suggests that when offering these products, Suncorp Group … may have misled consumers regarding the factors that would be taken into account when calculating their insurance premiums,” Slater & Gordon says on its website.

“It appears that premiums charged to customers were based on (among a range of factors) an assessment of the likelihood of a customer changing to a different insurer.

“This would likely have caused loyal, long-term customers to be charged more than newer entrants, functioning as a ‘loyalty tax’ built into customers’ premiums without their knowledge.”

Slater & Gordon says publicly available information suggests Suncorp and its AAI subsidiary may have engaged in the undisclosed “price optimisation”.

Suncorp has not commented directly on the announcement this morning by Slater & Gordon.

However, a spokesperson told insuranceNEWS.com.au: “We have made significant investments in our pricing and underwriting technology platforms, data models and the expertise of our team.

“Our premiums take into account a comprehensive range of data sources, which are frequently updated and reviewed.”

Slater & Gordon class actions practice group leader Ben Hardwick says millions of Australians may have assumed they were receiving a fair deal for remaining loyal customers while being secretly charged more for that loyalty each year.

“This is also likely to mean the loyalty discounts some customers were receiving were actually worth a lot less than they thought,” he said.

Last year, Slater & Gordon started loyalty tax class action proceedings against IAG on behalf of RACV, SGIO, SGIC and NRMA Insurance home customers.

Scrutiny on pricing practices has intensified since the Australian Securities and Investments Commission released a 2023 report on broken discount promises. The regulator took legal action against some insurers, securing significant court penalties.

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