MAG and Mutual Insurance

MAG believes that the NRMA should re-establish a Mutual Insurance company run for the sole benefit of NRMA members and policy holders, with profits shared.

Over the last decade insurance options have been wiped out. The old reliable mutual insurers have been swallowed up by a few large private operators who continue to sell under the old brand names.

Today, customers often don't realize who they are really dealing with. One example is IAG selling insurance under different brand names such as CGU, SGIO and NRMA Insurance.

The community needs mutual insurers to provide balance in the market. A mutual insurance company is owned by and exists for its members, delivering them high quality and value for money.

We never realise what we have until it's gone. NRMA members were conned into believing that nothing would change when NRMA Insurance was privatized in 2000.

People are now beginning to realise what they have lost.  

WHAT DO CUSTOMERS WANT FROM INSURANCE?

WHAT IS A MUTUAL INSURANCE COMPANY?

HOW IS A MUTUAL BETTER THAN A PRIVATE INSURER?

WHAT IS A PRIVATE INSURER?

WHAT ARE THE PROBLEMS WITH PRIVATE INSURERS?

WHAT IS THE OUTLOOK for a market dominated by private insurers?


WHAT DO CUSTOMERS WANT FROM INSURANCE?

Peace of mind that in the case of an accident their vehicle will be restored to the same or better standard than before the accident

Safe, high quality repairs

Choice of repairer who can be trusted

Hassle-free treatment of genuine claims

Fair and sympathetic response

Speedy claims resolution

Friendly service

Lowest possible premium.

WHAT IS A MUTUAL INSURANCE COMPANY

A mutual insurance company is a co-operative owned by its policyholders/members.

It only exists to provide benefits to its members

Mutuals negotiate better deals using the accumulated buying power of its members

HOW IS A MUTUAL BETTER THAN A PRIVATE INSURER?

A mutual distributes its profits to members through benefits, e.g. lower premiums, rebates, services and other benefits.

Being member-benefit focused it understands the importance of getting value for money not pushing cheap jobs to maximize profits. A cheap job is not a benefit for a member!

WHAT IS A PRIVATE INSURER

Private insurers are focused on maximising profits for their shareholders by:

•  Selling premiums at the maximum price that the market will bear

•  Minimising the cost of claims and repairs to the cheapest the market will bear

WHAT ARE THE PROBLEMS WITH PRIVATE INSURERS?

The interests of the shareholders of the private insurer, the customers and the vehicle repair industry are different and lead to an inevitable conflict.

The customer does not directly pay for the repairs to the vehicle and the repair quality is under the control of the insurance company. This introduces an unavoidable conflict of interest for private insurance.

•  The customer wants a safe, high quality job at the lowest possible premium.

•  The repairer wants to do a good job at the best price he can obtain

•  The insurer wants to maximise its return to shareholders

WHAT IS THE OUTLOOK for a market dominated by private insurers?

The market is now dominated by private insurers

•  Prices for the premiums will rise

•  More aggressive claims refusal

•  Use of second-hand or non-standard parts

•  Re-furbishment rather than replacement with new if it is cheaper

•  Aggressive tendering to secure the cheapest job

•  Replacement of benefits with add-ons for a price premium

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