NSW CTP reform delivers lower premiums
Driver premiums have dropped since the introduction of a new compulsory third party (CTP) motor scheme in NSW last December.
Average premiums in March were about 18.8% lower than a year earlier, the Insurance Council of Australia (ICA) says in a submission to the parliamentary committee supervising the scheme’s operation.
ICA’s figures are based on statistics from the scheme’s regulator, the State Insurance Regulatory Authority (SIRA).
“A core objective of the scheme was to decrease the cost of CTP insurance for NSW motorists,” ICA says. “This objective has been in very large part been realised.”
SIRA says the average premium is about $525, down from $528 when the hybrid no-fault scheme started on December 1.
ICA says insurers are allocating significant resources to providing mandatory real-time claims data to SIRA, improving data collection and reporting.
But the benefits may come with a high price tag.
“It remains unclear at this stage whether the benefits created by SIRA’s requirement for ‘real-time’ data in a long-tail scheme such as CTP outweigh the expense incurred by insurers in meeting this requirement,” ICA says.
“Insurers continue to explore the costs and benefits of this approach with SIRA.”
A submission from Suncorp also addresses the reporting requirement, calling for a “sensible balance”.
Insurers have had to submit data three times a day since April, up from the previous monthly reporting requirement.
“It is unclear how submitting data multiple times a day delivers customer benefits or improves performance of the scheme,” Suncorp says. “A sensible balance is necessary to ensure the timely provision of data in an efficient manner.”
The insurer recommends time limits for claims reporting and data exceptions be reviewed, to ensure an appropriate balance between timeliness and compliance burdens.