RAA achieved record revenue growth in financial year 2023, posting revenue of $807 million, and surpassing 805,000 members.
In a year of extreme weather events including the Murray River flooding and November storms, RAA stepped up to support members with more than 81,000 claims – totalling a record $525 million.
Chief Executive Officer Nick Reade said RAA was paying out more to members in claims than ever before and supporting local communities.
“As one of the most trusted organisations in the state, we were proud to be there when South Australians needed us most,” Mr Reade said.
“Extreme weather contributed to a challenging year for the insurance industry as a whole.
“These weather events are occurring more often, with greater impact, and are the biggest driver of increasing insurance premiums.
“With reinsurance costs going up across the globe, and continuing supply chain and inflationary pressures, it’s becoming more expensive to insure, repair and replace people’s homes and cars.”
Mr Reade said despite the challenges facing the insurance industry, the RAA Group continued to transform the business and deliver more for members.
“We’re growing and accelerating new businesses – diversifying our revenue streams and building a more resilient business model,” Mr Reade said.
“Our solar and battery and travel businesses are booming – each posting record sales last financial year and are showing no signs of slowing down.
“We’re also making a significant investment in a digital transformation to modernise our member and employee experience.
“This means we’re improving our member service whether they choose to interact with us in person, online, via the RAA app or over the phone.”
In the financial year, RAA also undertook an external review of our insurance pricing and member discounts following an industry-wide review initiated by ASIC.
Following RAA’s review, $25.5m has been provisioned for a remediation program in the 2023 results.
Mr Reade said approximately 180,000 past and current members would receive mostly small refunds through the program over the coming 12 months.
“Importantly, in these cases, our pricing was consistent with our Product Disclosure Statements and the premiums charged were exactly as intended,” Mr Reade said.
“However, our communication of how discounts applied could have been clearer in some of our marketing and promotional material.
“RAA holds itself to an extremely high standard. In line with our values to do the right thing by our members, we will be refunding members including interest.
“Many refunds will be small, as little as $20, while some could be up to a few hundred dollars depending on the number and length of policies and a range of other factors.”
Overall, the impact of extreme weather events and insurance claims costs, ongoing investment in digital transformation and the provision for the pricing remediation program, saw RAA post a $53.9 million loss after tax for financial year 2023.