Illegal Algorithm Costs Insurance Australia $40 Million

Statue of Lady Justice is seen on Central Local Court in Sydney, Australia, on July 5, 2017. AAP Image/Keri Megelus

Australia’s largest insurance company has been hit with the largest-ever penalty imposed by the courts against an insurer for failing to give promised discounts to NRMA customers.

The Federal Court has ordered Insurance Australia Limited to pay $40 million (US$26.4 million) after finding the company, wholly owned by ASX-listed Insurance Australia Group, made false or misleading representations to more than 600,000 customers between March 2014 and September 2019.