NRMA
Encyclopedia
NRMA refers to either of two historically related Australian companies:
At this time the planning and financing of main roads, in particular, had fallen into chaos following the defeat of the Main Roads Bill in 1911. Subsequent attempts to create a board to oversee main roads and distribute funding had also failed. The 1919 Local Government Act left all decisions to local councils, where decisions were made "from the point of view of local utility". Through-routes and main roads were assigned a low priority.
(RACA) had been campaigning for better roads since its creation. The Club had initiated a Good Roads Association in 1912, and its work was supported by the newspapers, notably the Sydney Morning Herald.
The National Roads Association was to be a broader and stronger pressure group seeking the same ends, and it received full support from RACA. When the Association was formally established on 4 February 1920, its provisional committee included RACA President, WJ McKinney, and RACA's Roads and Tours committee chairman, DM Cooper. There was also AR Bluett, secretary of the Local Government Association, who had held office with Cooper in the Goods Roads Association.
John Christian Watson (Australias third Prime Minister in 1904), became NRMA President in 1920 until his death in 1941. The NRA restructured as the National Roads and Motorists' Association at the beginning of 1924. The aims of the NRMA were to "cover everything necessary for the advancement and protection of motorists in all circumstances", a goal strikingly similar to that of RACA. This positioned the NRMA as a competitor as much as collaborator, particularly when it began to employ its own road service "guides". These returned servicemen "of exemplary character" patrolled specific areas, including the popular beaches of Coogee
, Bondi Beach
and Bronte
, or were based at congested spots on the roads out of the city where they being the NRMA could receive messages by phone or relayed by other motorists.
RACA and the NRMA continued, nevertheless, to work together on issues of shared concern, such as continued lobbying for better roads. They shared the same solicitor, McCartney Abbott. In a joint initiative the Princes Highway was "blazed with a red colour trail". Strips of colour banded by white were painted on telegraph posts, fences and trees as part of a network of trails along State highways.
The NRMA attended a 1925 meeting convened by RACA on traffic regulations, prior to a government traffic conference. Together with other motoring lobby groups, including the Motor Traders Association and Newcastle Automobile Club, they resolved to draft suggested reforms. Particular concerns included the need for a special traffic court, and a change to the "plethora of danger signs" that had appeared in the streets, accompanied by "frequently incomprehensible signals of police" at intersections. As an alternative to the red triangle placed by police at danger spots, the NRMA favoured (and sponsored) the highway lighthouse, a beacon powered by acetylene that could flash for as long as four months without attention.
In 1939, the NRMA had 66,234 members and a huge road service operation. When the war in Europe began, it made a £10,000 donation to Australia's war effort, and followed RACA's early lead in forming the NRMA Transport Auxiliary. This force of 500 owner-drivers would provide rapid troop transport if required. Staff member, Miss K Broadbent, organised a Women's Auxiliary Transport Corps and successfully trained 506 women to handle trucks, lorries, ambulances and motor cycles.
RACA and the NRMA were both involved in information campaigns during the war, including the discouragement of petrol hoarding, considered both unpatriotic and dangerous. After the war, lobbying by the NRMA, RACA and affiliates in other States had a direct effect on the 1949 Coalition Government’s promises to end petrol rationing and give a better deal on road grants and petrol tax.
At the end of the war RACA took the decision to cease its road service operations. The NRMA's growth had made its rival operations considerably wider in scope and reach. RACA's members were better served by an agreement concluded with the NRMA whereby RACA membership included entitlement to full NRMA services, an arrangement that still exists today. For many years an NRMA officer was based full-time at the RACA Club House.
who succeeded Alan Evans after the 2008 elections.
NRMA Insurance's financial success led to a surplus in funds which could not easily be distributed back to members. Insurance premium rebates to members had the effect of artificially and harmfully deflating the price for NRMA's insurance products. Demutualisation, whereby members exchanged membership rights for shares in a listed company, allowed funds to be distributed to members without affecting longer term product pricing.
At the same time demutualisation would address the perceived corporate governance issues that centred around the long-standing board wars. For example, instituational shareholders (who out of necessity would become significant owners of the large, newly listed company) would likely enforce a greater level of rigour and discipline on the board of directors. However, demutualisation would give control away from individual members and to institutional investors, with the result that motorists' interests would have less representation in governance.
When demutualisation was first proposed in 1994, conflict on the NRMA Board was described by an independent report as "of such magnitude and nature that it is debilitating to the organisation and potentially destructive". This first demutualisation, dubbed "Share the Future", initially received member approval. However, a successful court challenge mounted by some of the board's directors (Fraser v NRMA Holdings Ltd (1995) 127 ALR 543) derailed the plan, with the Federal Court of Australia
describing the initial information material distributed to members as "misleading and deceptive". "Share the Future" proposed demutualising the entire company, i.e. both insurance/financial services and membership/road service. Member concerns centred around possible increases in insurance premiums and road service fees and decreases in service quality brought about a more profit-oriented company.
After much discussion and some acrimony, the NRMA successfully demutualised in August 2000, forming two separate organisations in August 2000 – National Roads and Motorists' Association Limited, and NRMA Insurance Limited (later the Insurance Australia Group
Limited).
Insurance Australia Group Limited is a listed company owned by its shareholders. It has a number of operating subsidiaries using the NRMA brand, including NRMA Insurance Limited, as well as a number of other insurance and related brands.
In January 2006, the Australian magazine Business Review Weekly reported that NRMA Motoring and Services was considering starting a new mutual insurance company. The article noted that many obstacles would have to be overcome, including provisions in the de-merger agreement between NRMA and Insurance Australia Group which appear to prohibit such a move.
During 2004-2005, NRMA, in a joint venture
agreement with JF Meridian Trust, acquired the Travelodge Hotel Group chain of hotels in Australia.
In September 2006, NRMA Motoring and Services acquired 75% of the car rental company Thrifty Australia from troubled Mitsubishi Motors Australia
Limited in a multi-million dollar deal, however the deal was highlighted in the media and in NSW Parliament (Hansard extract, NSW Legislative Council, 19 September 2006, page 75 (article 46)) as potentially involving conflict of interest with the board member Gary Punch.
It has also continued to grow its travel and holiday operations by investing in tourist parks, and most recently in January 2007, acquired a major stake in the travel wholesaler Adventure World.
stance. The Sydney
Lord Mayor
, Clover Moore
said the NRMA, like big petroleum
companies, has a vested interest in campaigning for car use.
Greens
MP
, Lee Rhiannon
said the NRMA has an anti-cycleway agenda. Said Rhiannon: "The NRMA's anti-cycleway campaign is a crude attempt to boost money for road building. It's time the NRMA leadership came into the 21st century and recognised that encouraging more cyclists is an easy way to reduce road congestion." Rhiannon accused the NRMA of using misleading statistics in its campaign.
- The National Roads and Motorists' Association, known as NRMA Motoring and Services, is a member-owned mutualMutualMutual may refer to:*Mutual organization, where customers derive a right to profits and votes*Mutual information, the intersection of multiple information sets*Mutual insurance, where policyholders have certain "ownership" rights in the organization...
organisation offering roadside assistance, motoring advice and other services in New South WalesNew South WalesNew South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales...
and the Australian Capital TerritoryAustralian Capital TerritoryThe Australian Capital Territory, often abbreviated ACT, is the capital territory of the Commonwealth of Australia and is the smallest self-governing internal territory...
. - NRMA Insurance is a brand and operating unit of Insurance Australia GroupInsurance Australia GroupInsurance Australia Group Limited is an Australian publicly-listed company with its shares traded on the Australian Stock Exchange as ....
, a national insurance and financial services company. NRMA Insurance and NRMA Motoring and Services are independent companies and are both in agreement to use the same brand and name. Both companies are responsible for distinguishing the difference between both companies.
National Roads Association
The Australian National Roads Association, which would become the NRMA, was launched in 1920. Its original aim was not to provide road service or insurance, but to lobby for the improvement of roads in New South Wales.At this time the planning and financing of main roads, in particular, had fallen into chaos following the defeat of the Main Roads Bill in 1911. Subsequent attempts to create a board to oversee main roads and distribute funding had also failed. The 1919 Local Government Act left all decisions to local councils, where decisions were made "from the point of view of local utility". Through-routes and main roads were assigned a low priority.
The role of the RACA
The Royal Automobile Club of AustraliaRoyal Automobile Club of Australia
The Royal Automobile Club of Australia is an Australian motoring organisation, which has also incorporated the Australian Imperial Services Club since 1987....
(RACA) had been campaigning for better roads since its creation. The Club had initiated a Good Roads Association in 1912, and its work was supported by the newspapers, notably the Sydney Morning Herald.
The National Roads Association was to be a broader and stronger pressure group seeking the same ends, and it received full support from RACA. When the Association was formally established on 4 February 1920, its provisional committee included RACA President, WJ McKinney, and RACA's Roads and Tours committee chairman, DM Cooper. There was also AR Bluett, secretary of the Local Government Association, who had held office with Cooper in the Goods Roads Association.
Creation of NRMA and continued RACA involvement
Coogee, New South Wales
Coogee is a beachside suburb of local government area City of Randwick. It is located 8 kilometres south-east of the Sydney central business district, in the state of New South Wales, Australia. It is also a part of the Eastern Suburbs of Sydney....
, Bondi Beach
Bondi Beach, New South Wales
Bondi Beach is a popular beach and the name of the surrounding suburb in Sydney, Australia. Bondi Beach is located 7 kilometres east of the Sydney central business district, in the local government area of Waverley Council, in the Eastern Suburbs...
and Bronte
Bronte, New South Wales
Bronte is a beachside suburb of Sydney, in the state of New South Wales, Australia. Bronte is located 8 kilometres east of the Sydney central business district, in the Waverley Council local government area of the Eastern Suburbs....
, or were based at congested spots on the roads out of the city where they being the NRMA could receive messages by phone or relayed by other motorists.
RACA and the NRMA continued, nevertheless, to work together on issues of shared concern, such as continued lobbying for better roads. They shared the same solicitor, McCartney Abbott. In a joint initiative the Princes Highway was "blazed with a red colour trail". Strips of colour banded by white were painted on telegraph posts, fences and trees as part of a network of trails along State highways.
The NRMA attended a 1925 meeting convened by RACA on traffic regulations, prior to a government traffic conference. Together with other motoring lobby groups, including the Motor Traders Association and Newcastle Automobile Club, they resolved to draft suggested reforms. Particular concerns included the need for a special traffic court, and a change to the "plethora of danger signs" that had appeared in the streets, accompanied by "frequently incomprehensible signals of police" at intersections. As an alternative to the red triangle placed by police at danger spots, the NRMA favoured (and sponsored) the highway lighthouse, a beacon powered by acetylene that could flash for as long as four months without attention.
Launch of NRMA Insurance
The NRMA's membership was growing rapidly, nearly doubling to 7637 in the year to June 1925. An added incentive was NRMA Insurance, formed in 1925 and reestablished in 1926 as a private mutual company. By becoming a sub-agency of Lloyds of London, NRMA Insurance was able to offer household policies in addition to motoring insurance.Cessation of RACA
As the Depression took hold in 1928, it was apparent to both the NRMA and RACA that the two organisations were pursuing similar goals and duplicating services that might be combined. According to NRMA records, it was RACA that approached the NRMA regarding a merger. The NRMA went as far as examining RACA's books, but its Council voted against the merger. RACA subsequently rejected affiliation proposals put by the NRMA.In 1939, the NRMA had 66,234 members and a huge road service operation. When the war in Europe began, it made a £10,000 donation to Australia's war effort, and followed RACA's early lead in forming the NRMA Transport Auxiliary. This force of 500 owner-drivers would provide rapid troop transport if required. Staff member, Miss K Broadbent, organised a Women's Auxiliary Transport Corps and successfully trained 506 women to handle trucks, lorries, ambulances and motor cycles.
RACA and the NRMA were both involved in information campaigns during the war, including the discouragement of petrol hoarding, considered both unpatriotic and dangerous. After the war, lobbying by the NRMA, RACA and affiliates in other States had a direct effect on the 1949 Coalition Government’s promises to end petrol rationing and give a better deal on road grants and petrol tax.
At the end of the war RACA took the decision to cease its road service operations. The NRMA's growth had made its rival operations considerably wider in scope and reach. RACA's members were better served by an agreement concluded with the NRMA whereby RACA membership included entitlement to full NRMA services, an arrangement that still exists today. For many years an NRMA officer was based full-time at the RACA Club House.
Growth
The NRMA continued its growth and success as a motoring organisation and insurance company through the second half of the century, becoming the largest general insurer in Australia.Board conflicts
Starting in the 1980s and continuing for the next two decades the board of the NRMA was torn by a series of high profile conflicts, fought both in the media and the courts. Annual general meetings were marred by much shouting and anger, both between the board and the members and among board members themselves. In recent times, the board appears to have been more cohesive and is no longer subject to the media coverage it once was. The current Chairman of the Board (President) is Wendy MachinWendy Machin
Wendy Machin , is the president of the National Roads and Motorists' Association . She was the first woman member of the National Party of Australia elected to the New South Wales Parliament and was Minister for Consumer Affairs and Minister Assisting the Minister for Roads and Assisting the...
who succeeded Alan Evans after the 2008 elections.
Demutualisation
The combination of NRMA's continued financial success and ongoing board conflicts led to the proposal of demutualisation, first anticipating and then riding the wave of demutualisations that swept Australia in the 1990s.NRMA Insurance's financial success led to a surplus in funds which could not easily be distributed back to members. Insurance premium rebates to members had the effect of artificially and harmfully deflating the price for NRMA's insurance products. Demutualisation, whereby members exchanged membership rights for shares in a listed company, allowed funds to be distributed to members without affecting longer term product pricing.
At the same time demutualisation would address the perceived corporate governance issues that centred around the long-standing board wars. For example, instituational shareholders (who out of necessity would become significant owners of the large, newly listed company) would likely enforce a greater level of rigour and discipline on the board of directors. However, demutualisation would give control away from individual members and to institutional investors, with the result that motorists' interests would have less representation in governance.
When demutualisation was first proposed in 1994, conflict on the NRMA Board was described by an independent report as "of such magnitude and nature that it is debilitating to the organisation and potentially destructive". This first demutualisation, dubbed "Share the Future", initially received member approval. However, a successful court challenge mounted by some of the board's directors (Fraser v NRMA Holdings Ltd (1995) 127 ALR 543) derailed the plan, with the Federal Court of Australia
Federal Court of Australia
The Federal Court of Australia is an Australian superior court of record which has jurisdiction to deal with most civil disputes governed by federal law , along with some summary criminal matters. Cases are heard at first instance by single Judges...
describing the initial information material distributed to members as "misleading and deceptive". "Share the Future" proposed demutualising the entire company, i.e. both insurance/financial services and membership/road service. Member concerns centred around possible increases in insurance premiums and road service fees and decreases in service quality brought about a more profit-oriented company.
After much discussion and some acrimony, the NRMA successfully demutualised in August 2000, forming two separate organisations in August 2000 – National Roads and Motorists' Association Limited, and NRMA Insurance Limited (later the Insurance Australia Group
Insurance Australia Group
Insurance Australia Group Limited is an Australian publicly-listed company with its shares traded on the Australian Stock Exchange as ....
Limited).
Separate paths
National Roads and Motorists' Association Limited, now trading as NRMA Motoring and Services Ltd, remains a mutual company owned by its members. The current CEO, serving since September 2003 is Tony Stuart, formerly CEO of Sydney Airports Corporation. After serving more than seven years, Tony Stuart is now one of the longer serving CEOs of NRMA.Insurance Australia Group Limited is a listed company owned by its shareholders. It has a number of operating subsidiaries using the NRMA brand, including NRMA Insurance Limited, as well as a number of other insurance and related brands.
In January 2006, the Australian magazine Business Review Weekly reported that NRMA Motoring and Services was considering starting a new mutual insurance company. The article noted that many obstacles would have to be overcome, including provisions in the de-merger agreement between NRMA and Insurance Australia Group which appear to prohibit such a move.
During 2004-2005, NRMA, in a joint venture
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...
agreement with JF Meridian Trust, acquired the Travelodge Hotel Group chain of hotels in Australia.
In September 2006, NRMA Motoring and Services acquired 75% of the car rental company Thrifty Australia from troubled Mitsubishi Motors Australia
Mitsubishi Motors Australia
Mitsubishi Motors Australia Limited is a fully owned subsidiary of parent company Mitsubishi Motors Corporation of Japan. Its Australian administrative headquarters are located at Tonsley Park , with branch offices in Brisbane, Sydney, Melbourne and Perth...
Limited in a multi-million dollar deal, however the deal was highlighted in the media and in NSW Parliament (Hansard extract, NSW Legislative Council, 19 September 2006, page 75 (article 46)) as potentially involving conflict of interest with the board member Gary Punch.
It has also continued to grow its travel and holiday operations by investing in tourist parks, and most recently in January 2007, acquired a major stake in the travel wholesaler Adventure World.
Environment
NRMA Motoring and Services operates one of the largest private vehicle fleets in NSW with over 400 Patrol vans and other vehicles. The company undertook a mandate to convert the Patrol fleet to LPG in 2006/2007 in order to reduce its environmental impact.Criticism
The NRMA has been criticised for its anti-cyclewaySegregated cycle facilities
Segregated cycle facilities are marked lanes, tracks, shoulders and paths designated for use by cyclists from which motorised traffic is generally excluded...
stance. The Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
Lord Mayor
Lord Mayor
The Lord Mayor is the title of the Mayor of a major city, with special recognition.-Commonwealth of Nations:* In Australia it is a political position. Australian cities with Lord Mayors: Adelaide, Brisbane, Darwin, Hobart, Melbourne, Newcastle, Parramatta, Perth, Sydney, and Wollongong...
, Clover Moore
Clover Moore
Clover Moore , is an Australian politician, the Lord Mayor of the City of Sydney and an independent member of the New South Wales Legislative Assembly, representing the electorate of Sydney. Moore is the first publicly elected female Lord Mayor of Sydney. Prior to the 2007 NSW state election, she...
said the NRMA, like big petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
companies, has a vested interest in campaigning for car use.
Greens
Greens New South Wales
The Greens New South Wales is the state Greens party in New South Wales. It is a member party of the Australian Greens. The Greens NSW have one member in the New South Wales Legislative Assembly , five members in the New South Wales Legislative Council...
MP
Member of Parliament
A Member of Parliament is a representative of the voters to a :parliament. In many countries with bicameral parliaments, the term applies specifically to members of the lower house, as upper houses often have a different title, such as senate, and thus also have different titles for its members,...
, Lee Rhiannon
Lee Rhiannon
Lee Rhiannon , an Australian politician, is a Senator for New South Wales, elected at the 2010 federal election, representing the Australian Greens...
said the NRMA has an anti-cycleway agenda. Said Rhiannon: "The NRMA's anti-cycleway campaign is a crude attempt to boost money for road building. It's time the NRMA leadership came into the 21st century and recognised that encouraging more cyclists is an easy way to reduce road congestion." Rhiannon accused the NRMA of using misleading statistics in its campaign.