RAA Insurance posted a $53.9 million net loss for the year to June 30 despite revenue of $807 million.   

The SA insurer’s result was hit by extreme weather events including Murray River flooding and November storms which led to more than 81,000 claims, totalling a record $525 million. 

“These weather events are occurring more often, with greater impact, and are the biggest driver of increasing insurance premiums,” RAA CEO Nick Reade said. 

RAA Insurance also revealed it is to contact around 180,000 members to offer refunds in the next 12 months after a review found some may not have received premium discounts they were entitled to.  

It has provisioned $25.56 million for the remediation program. Refunds will range from $20 to a few hundred dollars. 

“RAA holds itself to an extremely high standard. In line with our values to do the right thing by our members, we will be refunding members including interest,” Mr Reade said. 

“Our communication of how discounts applied could have been clearer in some of our marketing and promotional material. 

“The marketing material has now been corrected and RAA Insurance self-reported a regulatory breach to ASIC,” the insurer said in its annual report. 

The admission comes after the Australian Securities and Investments Commission (ASIC) launched proceedings against RACQ Insurance in February for allegedly misleading statements regarding pricing promises, and said in June said it had commenced other investigations into insurers involving suspected failures to deliver on discounts.  

IAG is fighting ASIC allegations it misled customers about loyalty discounts via Insurance Australia (IAL), SGIO and SGIC, and its RACV brand joint venture. Separately, IAG was penalised $40 million in June for failing to honour discount promises made to NRMA branded policy customers.