Insurance Monitor - Discussion Paper on the pricing of new versus renewing insurance policies

The Emergency Services Levy Insurance Monitor’s office in NSW has recently released a discussion paper based on research which found evidence that some insurance companies who are subject to monitoring under the Emergency Services Levy Insurance Monitor Act 2016 (“the ESLIM Act”) are charging existing customers higher premiums than those charged for new customers in the home and contents insurance market.

The monitor is now calling for comment from the public. They are particularly interested in comments from those:

  • who have been with their home insurer for a number of years, and can provide evidence in relation to the changes in their home (building) and contents insurance premiums paid over time,
  • who have switched to an equivalent policy with a different insurer after a number of years with one insurer and have evidence on any savings made in the premium paid,
  • who have re-applied for insurance for an equivalent policy with the same insurer rather than accept a renewal offer from that insurer, and have evidence of any cost savings made through that process,
  • on whether they consider it fair for insurers to charge existing customers a higher premium than new customers, and
  • on what measures they consider regulators and/or policymakers should take to address the issue.

If anyone would like to make a submission, they should send an email to and mark it to the attention of the Pricing Analysis Project Team .Submissions will be accepted until 20 December 2018.


I seem to recall campaigns, not specifically insurance related, where new customers received a discount, bonus, special rate or some other reward for signing up - new contracts only, not renewals. This seemed reminiscent of what is being talked about here, and always seemed odd to me - if I was a long term or regular customer over many years why would I not get some kind of reward vs the price hopper customer always seeking a better deal? To some extent these days I am the latter - take nothing for granted, try not to be complacent, and assume the service provider will have no concern for ensuring price fairness in any way - moral/ethical or legal (it’s not the same thing, the corporate ethics training I do annually specifically states that top executives and the board can get an ethics compliance waiver covering anything we minions are compelled to comply with).

I can see the problem that modern companies face - how do we entice people on price without offering our existing customers the same price? lets see … if the company offers excellent, or even just good service and a fair and sustainable price, is that even a question?

Re specific example in the context of this post, I can’t offer any, except to say that TIO, taken over some time back by Allianz, have taken a different approach in the NT - they have seemingly jacked the prices on everything, across the board in my case - in core business by some, in areas they clearly want to divest they can be three (3) times the market price of even boutique insurers … Building, Contents, Vehicles. TIO had been an excellent option until the NT Government sold them off. The only reason you’d get a quote from them now is for a laugh …

On the question of existing vs new customers - is it fair? it doesn’t feel so. It’s a reason I’d walk - and have.

On what regulators et al should do? Seems like a difficult one to measure with a number of variables, but I think outing the companies and letting consumers make up their own mind might be as useful as anything. There are some who contend we already have way too many laws an regulations - the cost of compliance, monitoring, enforcement, etc will ultimately be borne by the consumer/taxpayer. It seems like simply outing them might be a good approach - of course one could use the banking analogy with the RC and suggest it is difficult for a customer to make their mind up between a dozen equally dodgy companies …


Before coming to CHOICE, I worked at a large insurance company for 17 years. It was repeatedly drummed in to all and sundry that the costs associated with acquiring a new customer were many times those of retaining an existing customer. To run the business efficiently, you needed to hang onto existing customers, even if it cost a bit to do so.

Nowadays, I don’t see evidence of many companies following that advice. Everything seems focussed on new customer acquisition, especially in the insurance industry. Policyholders need to shop around each and every year, for each and every policy type. It’s very time-consuming, and to me IT JUST DON’T ADD UP. :tired_face:

( Closing observation: things went downhill at my previous employer when there was a wholesale change of senior management, and insurance experts were replaced with bankers and legal eagles [vultures?]. I can only conclude that short-term incentives being offered to staff are causing this counter-intuitive behaviour. )


Short term incentives are the only thing that matters to short sighted people sadly - so many companies these days being run by finance or legal people, not by people who ‘know the business’ - which they confuse with someone who allegedly ‘knows business’ - a bit like confusing management with leadership …


If you consider how the workplace has changed and more and more people, especially in sales and the unskiled, become itinerants or ‘independent contractors’ or work for outsourcers how could anything beyond very short term be implemented? Don’t need to go there as the problems are many-fold with the incentives thing one of many.