The Australian Competition and Consumer Commission, which has previously recommended insurers clearly disclose the past year’s premium on renewal notices, has said the amount “actually paid” is the key figure. 

“We consider that, from a consumer’s perspective, the amount actually paid last year is the relevant premium to be disclosed for the purpose of our recommendation,” a spokesperson told insuranceNEWS.com.au. 

“Discounts or changes may be made to an initial quote for a range of reasons, but consumers want to know what their final bill is or was.” 

As insuranceNEWS.com.au has reported, an ABC report last week highlighted an RACQ Insurance renewal quoting the year-earlier premium before a discount was negotiated. The renewal premium was up 1.5% on the original stated figure, compared with a 39% jump versus the sum actually paid. 

The ACCC made its recommendation on renewal disclosures during its Northern Australia insurance inquiry, which heard that consumers sometimes were not aware of the final amount they had paid. 

It also proposed clear disclosure of the previous sum insured and any excess as part of proposals to help consumers better understand their policy, the amounts paid and factors affecting price 

The Federal Government has never provided a formal response to those recommendations, included in an interim report and the final document delivered in late 2020. 

The Insurance Council of Australia says the current code of practice requires that the premium from the prior year should be displayed alongside the premium being offered. 

“The amount shown for the previous year may not reflect adjustments or discounts that were made during the life of the policy or that were negotiated or provided at the point of payment,” a spokesperson said. 

RACQ has said it hasn’t previously received feedback that its communication has been an issue and typically policyholders will call or visit a store if they need more information. 

“We will, however, be reviewing this feedback to identify any opportunities to further clarify our messaging for members,” a spokesperson said. 

The Australian Securities and Investments Commission has said that it will consider the renewal disclosures and examine industry practices. 

Consumer Action Law Centre CEO Stephanie Tonkin says anything that misleads consumers over pricing is “concerning”. 

"We haven't heard of this practice directly from the people who call our helplines, but any misleading representation of actual savings and prices – similar to the kind of strategies supermarkets are being criticised for – is concerning, especially in the midst of a cost-of-living crisis,” she said.