NRMA

National Roads and Motorists' Association Limited
Motto	Helping people.
Formation	1920
Type	Travel, Motoring, and Leisure
Headquarters	Wynyard, New South Wales
Location	New South Wales, Australia
Membership	2.5 million members
Key people	Wendy Machin, President Michael Tynan, Deputy President
Website	www.mynrma.com.au

NRMA refers to either of two historically related Australian companies:

• The National Roads and Motorists' Association, known as NRMA Motoring and Services, is a member-owned mutual organisation offering roadside assistance, motoring advice and other services in New South Wales and the Australian Capital Territory.
• NRMA Insurance is a brand and operating unit of Insurance Australia Group, 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.

Early history

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 Australia (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

NRMA badge on a Rolls-Royce Phantom.

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.

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.

Recent history

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.^{[citation needed]}

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 Machin 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 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).

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.^{[citation needed]}

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.^[1]

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,^[2] 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.^[3]

Environment

NRMA Motoring and Services operates one of the largest private vehicle fleets in NSW with over 400 Patrol vans and other vehicles.^{[citation needed]} The company undertook a mandate to convert the Patrol fleet to LPG in 2006/2007 in order to reduce its environmental impact.^{[citation needed]}

Criticism

The NRMA has been criticised for its anti-cycleway stance. The Sydney Lord Mayor, Clover Moore said the NRMA, like big petroleum companies, has a vested interest in campaigning for car use. ^[4]

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. ^[5]

References

1. ^ "NRMA invests in Travelodge hotel group" (Press release). National Roads and Motorists' Association Limited. 2004-12-31. http://www.mynrma.com.au/cps/rde/xchg/SID-3F5768EC-1435357F/mynrma/hs.xsl/2004_050106.htm. Retrieved 2007-06-28. 
2. ^ "Thrifty Australia Acquired in Joint Venture Purchase" (Press release). National Roads and Motorists' Association Limited. 2006-08-02. http://www.mynrma.com.au/cps/rde/xchg/mynrma/hs.xsl/2860.htm?cpssessionid=SID-3F5768EC-A2DFF84D. Retrieved 2007-06-28. 
3. ^ "NRMA acquires travel wholesaler" (Press release). National Roads and Motorists' Association Limited. 2007-01-24. http://www.mynrma.com.au/cps/rde/xchg/mynrma/hs.xsl/4010.htm?cpssessionid=SID-3F5768EC-36846649. Retrieved 2007-06-28. 
4. ^ Moore, Clover (2008-01-11). "Cycling the way to go in this overcrowded city". The Sydney Morning Herald. http://www.smh.com.au/news/opinion/cycling-the-way-to-go-in-this-overcrowded-city/2008/01/10/1199554826137.html. Retrieved 2008-01-11. 
5. ^ Smith, Alexandra (2008-01-11). "Bike lanes dangerous, cyclists warn". The Sydney Morning Herald. http://www.smh.com.au/news/national/bike-lanes-dangerous-cyclists-warn/2008/01/10/1199554832979.html. Retrieved 2008-01-11. 

External links

• NRMA Motoring and Services
• NRMA CarWise
• NRMA Insurance