Suncorp sent bush fire victims who had lost their homes renewal policies for home and contents insurance and in some cases charged them premiums for homes that no longer existed, the Hayne royal commission has heard.

The fires on Christmas Day 2015 would destroy 116 properties in the region and another 334 properties would be affected. Suncorp’s general insurance brand AAMI would receive 34 claims.

Suncorp’s handling of the bushfire victims claims would blow up on November 2016 when Sarah Henderson MP made a speech to parliament taking the insurer to task for delays and low balling policy holders who were promised complete replacement, prompting Suncorp CEO Michael Cameron to write a letter to the Prime Minister.

In Mr Cameron’s November 17, 2016 letter he would say that AAMI was taking the allegations very seriously. He would also apologise for the sending of renewal notices and the charging of premiums to those who had lost thier homes.

“We will immediately refund the cost of those premiums and extend liability cover at no charge,” Mr Cameron’s letter read. “I would like to assure you that I am personally overseeing this issue and will keep your office updated as to our progress.”


Counsel assisting the royal commission, Rowena Orr, QC, asked Suncorp’s chief executive officer of insurance Gary Dransfield why Suncorp’s CEO would be writing to the Prime Minister about the handling of the Wye River claims.

“I believe the Prime Minister had taken an interest in the Wye River event …following the interest that Ms Henderson had brought to the mater that the Prime Minister might want to know what is happening,” Mr Dransfield said.

During questioning Mr Dransfield accepted that the company’s communications with the victims could have been better. He also acknowledged that the issuing of renewal notices and charging of premiums was conduct that fell below community standards and expectations.

Pressure to settle

Ms Orr would repeatedly put claims to Mr Dransfield that Suncorp tried to pressure customers into accepting cash settlements as part of the complete replacement cover.

Mr Dransfield said there were circumstances where a cash settlement would be sought such as when negotiations were dragging on or customer’s expectations were too high but denied it tried to pressure customers into accepting low ball cash settlements.

“Well certainly commercially we want to achieve what we feel is a reasonable claims cost outcome for us and the customer” Mr Dransfield said.

Mr Dransfield was shown emails from Suncorp’s former head of insurance Anthony Day to CEO Michael Cameron sent on Monday November 14 that said “Our preference (and contractual right) is cash rather than full rebuild)”.

Ms Orr would present evidence showing cast settlement offers that were considerably lower than independent quotes obtained by policyholders. One example that was highlighted in a meeting held between Suncorp and Sarah Henderson MP included an offer for $783,000 and an independent quote of $1.6 million.

Mr Dransfield accepted there were variations in the quotes and accepted that Suncorp would ask for two quotes before using the most competitive. He said that in many circumstances following a bushfire customers would prefer to move to another region or rebuild a different structure which would require a cash payment.

The hearing continues.

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