Where do home premiums go?

We understand that changes to your premium can be confusing. As a guide we have broken down where insurance premiums go, because it’s important to us that you know where your money is going.

Claims 40%

Naturally, you'd expect one of the largest parts of the premium collected are used to help payout claims. Claims are an important part of what we do to help protect what matters to you.

Government Taxes & Charges 20%

A part of the premium goes towards government taxes and charges. After we have calculated the amount to cover your insurance policy, any applicable stamp duty, GST, charge and levy are then applied.

Reinsurance 19%

A part of the premium collected goes towards paying our insurance premium to reinsurance providers. We purchase additional cover of reinsurance to protect against the exposure to large scale events such as storms, floods and cyclones. This helps us maintain our ability to payout claims.

Profit 12%

Like any business, we need to make a profit to ensure we can continue running our business year after year. Our profit can vary significantly from year to year depending on whether there were large scale events like storms, floods and cyclones.

Expenses 9%

Every business has operating costs that enable them to continue their operations and service their customers. That's why a percentage of the insurance premium goes towards the operating cost of running our business. We also invest in the technologies and products that would improve the services we provide to you.

What data did we use?

The information above is based on data aggregated across all AAI Home Policies and is calculated based on the period from 1 July 2016 to 30 June 2018. The data may vary from time to time, depending on the measurement period.
AAI Home Policies mean home building, home contents, home and contents (including fire and theft contents), landlord building, landlord contents, landlord building and contents, strata insurance and relocatable home policies of all the AAI Brands, issued by AAI Limited and includes policies with all types of optional covers. It does not include any home cover sold under a business policy.
AAI Brands mean AAMI, GIO, Suncorp, Apia, Shannons, CIL Insurance, Terri Scheer, Vero and Essentials by AAI.
Percentages are rounded to the nearest whole number.
This information is intended to be of a general nature and for information purposes only. ‘Where premiums go’ may differ and may change from time to time. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.

What impacts premium?

The below general information is relevant to Apia home (including home, contents, home & contents, home & contents extra, apartment, assisted living, village cover), landlord building, landlord contents, landlord building and contents (unless otherwise stated). Please refer to your relevant policy documents for more detail.

Many factors can impact the amount of premium that we charge our customers, some key matters are set out below. In addition to change in circumstances impacting your cover, premiums are also impacted by changes in our pricing practice, pricing factors and how we calculate premium from time to time.

Sum insured is the most you can claim for any one incident less any deductions that apply, unless stated otherwise in your relevant PDS. Repairs on high value homes also tend to cost more, resulting in higher premiums.

In some areas of Australia, natural disasters or severe weather events can happen more often and therefore, location can impact the premium more substantively. Certain areas with higher risk of theft, vandalism and other similar incidents will also affect the premium.

The materials used to build a home will affect the premium charges, in particular, the roof and wall materials as these are what protects a home from outside elements.

Excess is the amount you ordinarily have to pay for each incident when you make a claim. If you choose a higher excess, you may be out of pocket more when making a claim. A higher excess reduces our claims cost meaning we can reduce your premium. Higher excess means a lower premium, lower excess means a higher premium.

A premium may change depending on the total amount of claims we receive each year. If we receive more claims than expected, premiums can be impacted.

After we have calculated the amount to cover your insurance policy, any applicable stamp duty, GST, charge and levy are then applied. Government taxes and charges may change from time to time.

How can I review my premium?

Review your policies to make sure all details are correct. Some changes can impact your premium if they affect the premium factors. Below are some ways you can influence how much premium you pay under our suite of home products. When reviewing your policy, you should always consider your own personal circumstances and check whether your policy suits your own needs.

By increasing your excess it will lower your premium. However, decreasing your excess will mean you will pay a higher premium.

The amount you select as the sum insured for your building and contents will also influence your premium.

On renewal we also consider a range of factors that can influence the cost to rebuild the building and may choose to adjust the building sum insured shown on your certificate of insurance at the end of each period of insurance. This is to account for various factors including inflationary trends. However, at each renewal, you need to consider if the level of sum insured is sufficient for your situation and contact us if it is not appropriate.

We might offer you a discount for having more than one policy with us. Some policies are not eligible for a discount and whether or not we give you a discount can also depend on the combination of products you hold with us. To find out more about the multi-policy discount, please phone us on 13 50 50.

Discounts are also a factor that can affect your premium. The premium you pay for your insurance includes any discounts we have given you. Any discounts are usually calculated and applied before the application of government taxes and charges.

You should check your relevant policy documentation for information on discounts.

From time to time we might also offer discounts (such as a discount for quoting for and buying your new policy on-line) or some other special offer as part of a marketing campaign. If we do this, separate terms and conditions will usually apply. The amount and type of discounts that may be offered can change or be withdrawn. If you are eligible for more than one discount we usually apply any subsequent discount to the already discounted premium.

To make changes to your policy, log in online to your account or give us a call on 13 50 50.

Disclaimers:

This information is intended to be of a general nature and for information purposes only. What your premium goes towards may differ and may change from time to time. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.

The information provided is accurate and true as of 1st May 2019, noting we may change our pricing practice (and the premium factors) from time to time.

Australian Pensioners Insurance Agency Pty Limited ABN 14 099 650 996 is an authorised representative of AAI Limited ABN 48 005 297 807, the product issuer for Apia home (including home, contents, home & contents, home & contents extra, apartment, assisted living, village cover), landlord building, landlord contents, landlord building and contents. Read the Product Disclosure Statement before buying this insurance. Go to apia.com.au for a copy. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. Various products and services are provided by different entities of the Suncorp Group. The different entities of the Suncorp Group are not responsible for, or liable in respect of, products or services provided by other entities of the Suncorp Group.