Storm clouds loom over SGIC as policies swallowed by big sister
Business
South Australian insurer SGIC will begin transitioning its policies to sister company NRMA Insurance from next month, potentially sounding the death knell for the 50-year-old local brand.
Owned by listed company Insurance Australia Group (IAG), NRMA began a television advertising campaign on SA screens last night, announcing that SGIC compulsory third party insurance will become NRMA CTP from July 1.
It is believed to be the first step in transitioning SGIC home and motor vehicle insurance products to NRMA Insurance in the second half of 2022.
In South Australia, CTP insurance is provided by government-approved CTP Insurers as part of the vehicle registration process.
Approved insurers are SGIC, AAMI, Allianz, QBE and Youi.
SGIC and NRMA Insurance are part of IAG, Australia’s largest general insurer.
An IAG spokesperson said while CTP policies would change to NRMA for new and renewing policyholders, the same SGIC teams would continue to support CTP customers in South Australia to ensure a smooth transition for customers.
“The features and benefits of the NRMA Insurance CTP policy will remain the same as the SGIC CTP policy,” the spokesperson said in a statement.
“We will contact our SGIC CTP policyholders before 1 July to provide further information about the changes and the support and services available from NRMA Insurance.”
Other IAG brands include RACV, SGIO, and CGU.
SGIC began operating 50 years ago in 1972 as the State Government Insurance Commission and grew to be the largest general insurer in South Australia by the early 1990s.
The state government sold off the company in 1998 to Western Australian company SGIO, which was then acquired by NRMA in 2000.
The insurance industry has faced several major challenges in Australia in recent years including major fires, floods and the coronavirus pandemic.
This has contributed to IAG’s shrinking market cap in the past three years, which has seen its share price more than halve from $8.56 at the end of June 2019 to $4.26 at Friday’s market close.
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NRMA Insurance announced in November 2021 it would begin offering motor, home and business general insurance under the NRMA brand in South Australia and Western Australia as part of a national expansion.
At the time it said the expansion would create 20 new roles at its Adelaide call centre.
“From the Nullarbor all the way down to Mount Gambier, we hope our products will cater to the unique style of South Australians and provide more choice when deciding how to protect the things they care about – their cars, homes or businesses,” NRMA Group Executive Julie Batch said in November.
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