Two million people bought travel insurance from Allianz during a two-and-a-half year period in which it published incorrect statements on its website, including that customers were covered "wherever" they went, even though some countries were excluded.
As the royal commission puts general insurers under the microscope, the royal commission revealed that since as far back as 2012, Allianz had included misleading statements online, and it took years to remove them once concerns were raised.
By late 2015, an external law firm had raised concerns about its use of the word "unlimited" in some travel insurance, but Allianz decided not to tell the corporate watchdog, or to remove the web pages, until the middle of this year.
Allianz estimates that about 2 million customers bought travel insurance from it and partners since 2015, the time of a major website update, and a "subset" of this group would have been affected by the misleading statements. The insurer is currently in talks with the corporate cop over how it will compensate customers.
In one case, the commission was told the Allianz website included the claim: "Wherever you're travelling, whatever your needs, Allianz travel insurance has the range of options to provide the right travel cover for your budget."
However, senior counsel assisting the commission, Rowena Orr QC, said this was wrong because the company's insurance excluded claims for countries where the Department of Foreign Affairs and Trade had made travel warnings.
In another case, its website said the "basic" policy provided "unlimited" cover for overseas emergency medical assistance." In fact, it only provided cover of up to $1,000 for some overseas medical procedures, such as emergency dental work.
Some of the errors went back as far as 2012, Ms Orr said, and it affected insurance that was also sold by Allianz through other partners including airlines, credit card issuers, or travel agencies.
Ms Orr took Allianz executive Michael Winter to a range of internal documents that showed the problems were identified as far back as late 2015, but Allianz did not have the material taken down, or report the issue to ASIC, until mid this year.
"I want to put to you that the sequence of events that I've taken you to demonstrate that it was more important at Allianz to protect the bottom line than to stop misleading your customers?," Ms Orr said.
"Yes," Mr Winter replied.
The issue was reported to ASIC in June this year, Ms Orr said. Soon after Allianz realised that the problem also affected 76 partners such as airlines and other financial institutions that were selling its policies.