No more Customer Charter, no more AAMI

It is hardly news to anyone that insurance companies are all nice, caring and eager to take care of us for as long as we don’t make any claims. Paying premiums — easy: no waiting for hours on hold on the phone, no delays, no problems. Getting help when it is really needed — well... suddenly things are not so easy, quick and simple anymore.

One can only say how good an insurance company is after they have been through a claim process with them. Until then, it’s just marketing.

However, some companies can show a glimpse of their true nature even without getting into an insurance claim case. We just need to pay a bit more attention.

Take AAMI for example. Before it was bought by Suncorp, it was a pleasant company to deal with, at least while choosing and maintaining an insurance policy. (The author has never made any insurance claims —touch wood!)

Before 2007

Back then, AAMI customers could make inquires in person, in AAMI offices, and the employees seemed to be very competent and diligent. The insurance policy was no-nonsense and the price was reasonable. People’s privacy and security has been respected, and AAMI was honouring Australian Privacy Principles: it did not demand to know the customer’s residential address for TPPD policy because it was irrelevant to the policy cover. The customers could use a PO box address for postal communications and didn’t have to contact AAMI every time they moved house.

And, of course, there was the famous AAMI Customer Charter, which was the main reason behind the good service and the employees’ competence.

“Promises are easily made, and just as easily forgotten. At AAMI we believe that you should only ever make promises you can keep. As the first Australian insurance company to make service promises to its customers in a charter, we continue to enhance our commitments and deliver them to you in this Customer Charter.”
(AAMI Customer Charter document)

“AAMI Customer Charter

  • “Introduced in 1996, the first AAMI Customer Charter contained 20 promises. Today it has 21 promises and sets out in plain English the quality of service guaranteed to customers.
  • “This charter is supported by monetary penalties in the customer’s favour for any breaches, as well as annual independent audits, annual publication of results, a dedicated Charter office and a dispute resolution process.”

(AAMI Fact Sheet document)

“Our passion for doing the right thing permeates all aspects of AAMI's behaviour. This is no more evident than in the AAMI Customer Charter, which enables customers to request a $30 penalty against the company whenever they believe we have breached a Charter promise. While not a financially large amount individually, the potential impact of this provision is significant considering AAMI has some 4 million customers and receives several million calls per annum, each answered by a real person.”
(aami.com.au, AAMI website. As of 1 March 2014, this paragraph is still present on AAMI website in the Corporate Information section, most probably due to AAMI's negligence, but the link to the Customer Charter www.aami.com.au/insurance-services/customer-charter no longer works.)

“AAMI introduced the first customer charter to the Australian insurance industry and Australian retail community which shows its courage to be innovative in its commitment to customers.”
(Brett Whitford – Executive Director, Customer Service Institute of Australia)

Then, in 2007, Suncorp Group bought AAMI, and things started to change, gradually. Crucial words were edited out of the much-praised Customer Charter. Bit by bit, year after year...

2008

AAMI Customer Charter 2008

Accessibility:

1. We will be on call 24 hours a day, seven days a week and at all times we will have a decision-maker available to respond to your needs. Simply call us on 13 22 44 (please remember timed charges apply from mobile phones).

2. We will provide our documentation in plain language.

3. We will respond in detail, by phone or in writing, to all written customer enquiries within five working days.

Personal Information – Privacy, Access and Correction:

4. We value the personal information you give us and will take all reasonable precautions to prevent unauthorised access to that information.

5. We will not give your personal information to any other organisation for their marketing purposes.

6. We will, with your help, keep your personal information accurate, complete and up to date. We guarantee to correct any error we make on your renewal notice that you bring to our attention.

7. You have the right to inspect the personal information we hold about you, subject to some exceptions relating to information given in confidence and claims investigations. Please ask for our brochure AAMI and Your Personal Information.

Motor Vehicle Service Guarantees:

8. When we recommend our Valet Service for your car claim, for no extra cost we will:

  • Pay for your taxi to home or work after you deliver your car to our nearest Customer Service Centre
  • Make all the necessary repair arrangements for you
  • Nominate a person who will keep you fully informed of the progress of those repairs
  • Pay for your return taxi fare to collect your repaired car
  • Contact you within five working days of you collecting your repaired car, to ensure you are satisfied with its repair.

9. All AAMI Motor Vehicle Assessors will be qualified motor vehicle repair tradespeople.

10. The quality of workmanship and the materials authorised in the repair of your car will be guaranteed for the life of the car.

11. Within three working days of agreeing to settle your motor vehicle total loss, we will post a cheque for the agreed amount or deposit it directly into your nominated bank account.

Home Claims Service Guarantees:

12. If your contents are stolen from your home, we will contact you by telephone:

  • The next working day after lodging your claim to confirm the next steps in the process
  • During the course of the claim to keep you informed
  • To make a final contact to confirm your satisfaction with the repair or replacement

13. When the home you permanently live in is damaged by an event covered under your Home Building Insurance Policy, and we agree it is unliveable, we will:

  • Arrange emergency accommodation for you and your family within three hours
  • Contact you within 24 hours to confirm the next steps
  • Arrange funds as an advance against your settlement, if required
  • Provide up to three trauma-counselling sessions for you and your family, if required.

14. The quality of workmanship and the materials used in any repair or rebuilding of your home and contents that we arrange and authorise will be guaranteed for the life of the property.

Premiums:

15. We will reward long-term claim-free driving by giving eligible policyholders a Maximum No Claim Bonus Rating for life. For a full explanation, please see the AAMI Comprehensive Car Insurance Policy booklet.

Consumer Appeals:

16. AAMI endeavours to resolve all disputes quickly and fairly. To assist in this, we maintain a free and accessible internal consumer appeals service. To use this service, simply call us on 13 22 44. For further details, please see our brochure What to do if you don't agree with our decision.

Environment and Community:

17. We will report on our performance against measures of our commitment to open and honest business practices.

18. AAMI will report on its environmental initiatives annually, as it promises to reduce its carbon footprint.

Consultation, Accountability and Audit:

19. We will report publicly and annually regarding our compliance with this Charter. A registered company auditor will independently audit our report.

20. This Charter commenced on July 1 2008 and will be reviewed annually.

Penalties:

21. You have the right to request a $30 penalty payment whenever you believe we have failed to meet any of the promises numbered 1—16 outlined in this Charter. If we fail to meet promise 18, we will donate $25,000 to a not-for-profit organisation directed at environmental activities.

It sounded great! Whether AAMI actually did live by its charter at all times, especially when claims were made, was, perhaps, another story, unbeknown to the author. But on paper it did look impressive.

A copy of AAMI Customer Charter 2008

2010

In 2010 AAMI sent its PO-box–preferring TPPD customers letters saying “Our records show that we do not have the full address where your car is kept overnight...” Despite that for years before, their records were perfectly happy. A phone call with the question why AAMI suddenly needs the physical address resulted in a reply that they have got a new system and that’s how they do things now. There was little choice, and the physical address has been supplied.

Next came a letter demanding a payment for the “change of details”. Unbelievable: first they demanded a different address because their system suddenly needed it (not the customer!), and now they wanted the customer to pay for that! After the initial shock, another phone call to AAMI was made, and the author was assured that it was some mistake in the “new system” and the letter should be disregarded.

Once the erroneous payment demand due day has passed, another letter arrived with threats to cancel the policy due to failure to pay. After making a series of long phone calls, being switched from one person to another, explaining the problem over and over again, all in vain, the author decided that it was easier to pay than waste any more time on the attempts to figure out what was wrong with AAMI’s new system.

Perhaps, it was a good time to ask AAMI to fulfil its Charter promises?

2011

The Customer Charter undergone severe editing. The following paragraphs were deleted:

5. We will not give your personal information to any other organisation for their marketing purposes.

6. We will, with your help, keep your personal information accurate, complete and up to date. We guarantee to correct any error we make on your renewal notice that you bring to our attention.

7. You have the right to inspect the personal information we hold about you, subject to some exceptions relating to information given in confidence and claims investigations. Please ask for our brochure AAMI and Your Personal Information.

8 (partially). When we recommend our Valet Service for your car claim, for no extra cost we will ... nominate a person who will keep you fully informed of the progress of those repairs.

9. All AAMI Motor Vehicle Assessors will be qualified motor vehicle repair tradespeople.

15. We will reward long-term claim-free driving by giving eligible policyholders a Maximum No Claim Bonus Rating for life.

17. We will report on our performance against measures of our commitment to open and honest business practices.

18. AAMI will report on its environmental initiatives annually, as it promises to reduce its carbon footprint.

21 (partially). If we fail to meet promise 18 (Environmental), we will donate $25,000 to a not-for-profit organisation directed at environmental activities.

A copy of AAMI Customer Charter 2011

AAMI closed all their branches in the country. They no longer want to provide face-to-face service and moved all their customer interaction online and over the phone. There are no more AAMI offices for customers to come in and deal with the problems more efficiently in person, without being switched from one phone line to another. AAMI removed all physical addresses from its website (despite starting to demand physical addresses from its customers!), and all the contacts with AAMI could only be made by phone or by mail.

All that AAMI customers get from now on is a voice on the other end of the line. There is no way of knowing who that person is and where they are, yet they have access to all personal details of the customer, and who knows how safe and secure those details are now.

Older people and people who appreciated and expected good customer service now feel like they are being treated as a nuisance, that AAMI’s preferred market now are younger people who don’t ask for much, don’t read documents longer than half a page and happy pushing online buttons.

Everyone knows that some issues are impossible to explain over the phone, but it is also impossible to make sure over the phone that the appropriate actions were indeed taken, which saves AAMI the bother and hassle of doing the job properly.

AAMI wins Money Magazine’s “Insurer of the Year 2011” award.

2012

The following promise was removed from the Chapter:

We will report publicly and annually regarding our compliance with this Charter. A registered company auditor will independently audit our report.

In November 2012, AAMI issued a Supplementary Product Disclosure Statement to abolish the Customer Charter:

“The purpose of this SPDS is to remove all references to the AAMI Customer Charter from each PDS.”

What about the solemn “Promises are easily made, and just as easily forgotten”? It looks like promises are indeed easily forgotten.

A copy of AAMI Customer Charter 2012, front, a copy of AAMI Customer Charter 2012, back

AAMI wins Money Magazine’s “Insurer of the Year 2012” award.

2013

In July 2013, Australian Associated Motor Insurers (AAMI), Suncorp Metway Insurance, GIO, AMP, Resilium, Aust Alliance, Apia, InsureMyRide, Shannons, Bingle.com.au and Just Car Insurance were transferred to a “related company” AAI Limited. Big, bigger, biggest, huh? Sadly, AAMI is not the only one hit by this plague. Many other companies create an illusion of competition and diversity by trading under several brands, and very often customers don’t realise that there is nothing substantial behind a brand — just marketing, an illusion of free choice and the same monopolistic giant. Imagine the smirk on the faces of their management when a customer, unhappy with the service provided by one company, decides to leave and go somewhere else... and ends up taking a new policy with another “brand” of the same business rather than with a completely separate company.

Grant Taylor, the Head of AAMI Distribution, said that it “is one of four proposed schemes which are occurring simultaneously as part of an internal organisation” and assured that apart from this change, current policy holders will not be affected, and it will not have any impact on either the handling of the policy or any claim customers make under their policy.

Well, we all can trust AAMI when it comes to promising no changes, can’t we? And, of course, if someone disagrees, they can take their insurance elsewhere... Provided that “elsewhere” is not or will not be transferred, bought, sold, acquired, reorganised or integrated into the abovementioned monster.

“AAI will issue AAMI branded general insurance policies (and PDSs for those policies) and will trade under the business name ‘‘AAMI’.”, says the new SPDS announcing the death of real AAMI. From now on AAMI is just a “brand” — a logo, a sticker, a photo of the ubiquitous AAMI-girl, a piece of junk mail, an annoying ad — nothing more.

“Lucky you’re with AAMI”, declares the pestering advertisement. Never mind there is no AAMI.

AAMI wins Money Magazine’s “Insurer of the Year 2013” award.

2014

The trend continued in 2014:

  • Premiums have gone up, as per usual.
  • Excesses have gone up, as per usual.
  • Legal liability limit remained the same, as per usual.
  • Fire and theft damage covered amount remained the same, as per usual: $5000 maximum to replace your stolen or burned down car. Happy car shopping with 2014 prices!
  • Uninsured motorist damage covered amount remained the same, again, as per usual. AAMI is very proud to offer this uninsured motorist service extension, which means that if your car was smashed by an uninsured driver who has no money neither for insurance, nor for paying you for repairs, you will get $3000 maximum, and that is provided you can give AAMI the name and address of the uninsured driver, and the registration details of his/her vehicle, and they agreed to pay your claim. If the driver decided to disappear from the scene of the accident, you won’t get even the scanty $3000 to repair or replace your car (as if it was possible to buy a roadworthy car for $3000 in 2014 to begin with).

AAMI wins Money Magazine’s “Insurer of the Year 2014” award. Forth year in a row, despite the steady drop in the customer service standards! How can that be possible? Perhaps, the Money Magazine, being mainly a magazine for investors, favours AAMI for its increase of profits and share price over the past few years?

If any company cuts corners, closes its offices, sacks experienced and competent front office staff, changes its policies to permit itself to not do its job properly, outsources jobs in third-world countries, employs less competent people and spends less on the customer services while charging their customers more, naturally it is going to increase its profits, for some time, before it loses all its reputation and devalues the brand. But then, if that company already owns dozens of brands, it can go on like this for quite some time... We can only hope that this is not the plan AAMI, Suncorp or AAI have in mind.

There are no miracles in the insurance companies world. The only way for an insurance company to become big and rich is to find as many ways as possible to take from its customers much more than it gives back.

AAMI - just promises
Promises... promises... —Precisely!
(AAMI Customer Charter Annual Report 2004–2005)

If you had an experience of making claims with AAMI both before and after it was swallowed by Suncorp, you are welcome to share it if you like.

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