Despite ongoing criticisms of insurers’ use of preferred smash repairer schemes by the motor industry, the Australian Competition and Consumer Commission (ACCC) has given a thumbs-up to most aspects of the scheme being run by IAG subsidiary NRMA Insurance.

NRMA policyholders wanting to choose their own repairers are required to pay a higher premium. Smaller smash repairers say this is wrecking their industry.

But ACCC Chairman Graeme Samuel says the commission has accepted IAG’s submission that the arrangement allows it to more efficiently price [its] motor vehicle insurance products.

“Consumers are still able to have a choice of repairer – either through deciding to pay the additional premium or by acquiring motor vehicle insurance through an alternative insurer.”

The ACCC’s decision doesn’t relate to other aspects of IAG’s preferred repairer arrangements, including how the repairers are chosen and the merits of the insurer’s web-based repair management scheme. Mr Samuel says the commission’s assessment was “limited to considering the pros and cons of the conduct notified – that is, the offering of a cheaper premium to customers that agree to their insurer choosing the repairer…”

NRMA Insurance CEO Rick Jackson told Sunrise Exchange News the company has always maintained the repairer option has a public benefit, “and the ACCC has assessed the situation and found the benefit outweighs any detriment”.

A Productivity Commission draft report into the relationship between the smash repair industry and insurers was released in November last year. The Government is assessing submissions.