The State Insurance Regulatory Authority (SIRA) says it intends to issue a compulsory third party licence to Youi, making it the first insurer to be added to the scheme since reforms were introduced in 2017.

SIRA says a rigorous application process has found Youi meets all requirements for licensing, and it's satisfied the firm has the financial sustainability and capacity to effectively deliver services to policyholders and injured road users.

“This is good news for motorists as increased competition in the market will encourage even better premium affordability,” the regulator said.

At present the CTP insurers in the state are AAMI, Allianz, GIO, NRMA Insurance and QBE.

Youi has previously offered CTP insurance as an agent for QBE in an arrangement that ceased in April last year.

The reforms, which started three years ago, introduced no-fault cover and aimed to reduce the cost of premiums.

A Youi spokesperson says the company is unable to comment at this stage on the SIRA licensing announcement.