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Allianz refreshed its online travel insurance website pages on 11 February 2016. Allianz is a leading provider of travel insurance in Australia.

Allianz sold 226,600 travel insurance policies with a gross sales value of $35,698,909 in the period from 11 February 2016 to 6 June 2018.

Allianz was the underwriter, and AWP the distributor of the travel insurance products. AWP published the same information as Allianz on its “Purchase Path” webpage. During the same period, AWP sold travel insurance policies with a value of $22,609,378.

Neither Allianz nor AWP carried out adequate legal compliance when they refreshed their website pages. This failure led to two reckonings.

The first reckoning came in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Final Report on 1 February 2019 contained a case study on Allianz, focusing on the misleading and deceptive content of the travel insurance web pages. The conclusion was that Allianz had a poor compliance culture (Volume 2, page 379). The Royal Commission referred the conduct to ASIC (Australian Securities and Investments Commission), which regulates insurance products.

The second reckoning came when ASIC charged Allianz and AWP with misrepresenting the characteristics or level of coverage on their web pages of its travel insurance. On 28 February 2025, the NSW Supreme Court fined Allianz Australia $13,500,000, and AWP $3,300,000 for breaches of the Corporations Act 2001 (Cth).

The decision is R v Allianz Australia Insurance Ltd (ACN 000 122 850); R v AWP Australia Pty Ltd (ACN 097 227 177) [2025] NSWSC 127 (Justice Rothman).

This is a legal analysis.

Allianz Travel Insurance

Allianz Travel Insurance covers costs and risks encountered before and during travel.

Costs and risks covered are: Cancellation Fees and Lost Deposits, Travel Delay Expenses, Hospital Cash Allowance, Luggage and Personal Effects, Additional Expenses and Loss of Income benefits.

Policy limits and sub-limits apply to these costs and risks.

Conditions and exclusions apply to Personal Liability and Overseas Emergency Medical Assistance benefits.

Royal Commission findings

The Royal Commission found 39 misleading or deceptive representations in relation to policy limits and sub-limits and conditions and exclusions remained on the Allianz travel insurance web pages in the period from 2016 to 2018.

For example, the cover for overseas emergency medical and hospital expenses was described as “unlimited” or maximum cover. It did not state that sub-limits applied or if stated, the sub-limits were stated incorrectly.

The Royal Commission found that Allianz’s compliance systems were inadequate. These matters contributed to the misleading and deceptive content on the travel insurance pages on the Allianz website:

  1. Inadequate Document Compliance Sign-Off processes for monitoring the content of the updated website. The inhouse corporate solicitor was busy with home insurance, boat insurance, motor insurance and life insurance, in priority to travel insurance. The General Manager did not approve the solicitor’s proposal to engage an external law firm to review the content at a cost of between $25,000 to $30,000. Instead, he passed the buck from Sales Manager to Corporate Compliance Manager to Product Support Manager. It was not until November 2016 that the solicitor completed the review of the travel insurance content. Even them, no action was taken upon the issues list he circulated. The buck continued to be passed until 2018.
  2. No standard processes existed to monitor and confirm that remedial actions had been implemented prior to closing reported incidents, including website review.
  3. Inadequate oversight of AWP.
  4. Not giving sufficient priority or adequate resources to compliance, caused by an insufficient appreciation of the consequences for customers of the misleading and deceptive content on the travel insurance pages of the website.

Supreme Court proceedings for making of false statements

ASIC brought criminal charges against Allianz and AWP for breaches of sections 1041E(1) and 1311(1) of the Corporations Act 2001 (Cth).

s 1041E False or misleading statements

  1. A person must not … make a statement, or disseminate information, if:
    1. the statement or information is false in a material particular or is materially misleading; and
    2. the statement or information is likely:
      1. to induce persons … to apply for financial products; … and
    3. when the person makes the statement, or disseminates the information:
      1. the person does not care whether the statement or information is true or false; or
      2. the person knows, or ought reasonably to have known, that the statement or information is false in a material particular or is materially misleading.

s 1311 General Penalty Provisions

  1. A person who:
    1. does an act or thing that the person is forbidden to do by or under a provision of this Act; …

Is guilty of an offence by virtue of this section.

If the offence is committed by a body corporate, the maximum penalty is the greater of 45,000 penalty units (one penalty unit is $330) or 10% of the annual turnover of the body corporate.

Allianz pleaded guilty to the six charges and AWP pleaded guilty to the single charge preferred against it. They were given a 25% discount for making pleas of guilty at the earliest opportunity. The Court imposed one penalty (i.e. fine) on Allianz, instead of one for each of the six charges. The Court took into account cooperation with ASIC and the law enforcement agencies in setting the fines.

In handing down his decision, Justice Rothman said: “… it is important that corporations take the steps at the highest level to ensure that proper processes are in place which prevent breaches of this kind… these breaches were essentially caused by a desire not to expend the necessary monies to ensure proper oversight of that which is published by the company”. [at 85]

The Court said that the penalty should be sufficient to be an “incentive to ensure proper processes are in place to prevent … any risk that misleading information will be published” and for the corporation to not treat the punishment as a cost of doing business.

The Court assessed the seriousness at a level significantly below midrange.

The Court imposed a fine of $13.5 million on Allianz and $3.3 million on AWP. Allianz and AWP were ordered to pay ASIC’s legal costs and investigation costs.

Comments

When refreshing a website, the devil is usually in the detail – the disclaimers, the terms and conditions, and evidence to justify new statements made. The cost of legal review is usually modest compared with the benefit of legal compliance.

Separate to the criminal convictions, ASIC secured $10 million in customer remediation from Allianz and AWP for travel  insurance potentially mis-sold to around 31,500 customers through Allianz’s own website and those of its distribution partners, including Expedia (ASIC media release 20-264MR).