Insurance Australia Group (IAG) is paying AU$138 million (around NZ$149.3 million) to settle a class action against two of its subsidiaries.
Brought by Johnson Winter & Slattery against IAG firms Swann Insurance (Aust) Pty Ltd and Insurance Australia Limited, the case revolves around 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,” said the insurance giant in a statement.
It was noted that IAG anticipates a net after-tax impact of less than AU$50 million (around NZ$54.1 million) from the settlement. The approximation spans all related costs and after insurance recoveries.
Meanwhile the gross payment for the class action settlement is subject to approval by the Federal Court of Australia.