IAG agrees class action settlement
06 Oct 2020
IAG has agreed to a settlement of the class action brought against its subsidiaries, Swann Insurance (Aust) Pty Ltd (Swann) and Insurance Australia Limited, by Johnson Winter & Slattery.
On 11 April 2019 IAG provided initial advice of this proceeding, which relates to add-on insurance products sold through motor vehicle and motorcycle dealers.
IAG exited these business areas with the sale of Swann’s rights to distribute through motor vehicle dealers in August 2016 and the cessation of distribution through motorcycle dealers in the financial year ended 30 June 2018.
The settlement involves a gross payment of $138 million and is subject to approval by the Federal Court of Australia.
Inclusive of all related costs and after insurance recoveries, IAG anticipates a net after tax impact from this settlement of less than $50 million. This will be reflected in IAG’s reported earnings for the six months ended 31 December 2020.