Allianz has withdrawn its appeal against a NSW Supreme Court decision to uphold a $1.8 million compulsory third party (CTP) insurance claim.

The claim involves a 2012 accident in Sydney. Manuel Larriera was severely injured when an oncoming vehicle veered onto his side of the road and hit his car head-on at 100kmh.

Allianz was the insurer of the at-fault driver.

Last year Allianz went to the Supreme Court to dispute the sum the Claims Assessment and Resolution Service (CARS) determined should be paid to cover past and future earnings.

CARS assessed Mr Larriera’s past loss of earnings at $155,997 and future losses at $888,423, including a superannuation component.

Allianz argued CARS failed to comply with Section 126 (3) of the Motor Accidents Compensation Act, had failed “to consider, take into account or engage with” its submissions about the quantum of past and future economic loss, and that the assessment of these heads “was irrational and illogical” lacking “any intelligible justification”.

It lost the decision in April but was planning to appeal. It withdrew early last month.

Allianz spokesman Nicholas Scofield told insuranceNEWS.com.au it is an insurer’s right to review CARS decisions it deems incorrect.

“It is important for the affordability of CTP policies for NSW car owners that any amounts of compensation paid under the scheme are fair and correct according to the law, and the scheme provides for review mechanisms where an insurer or a claimant believes that a decision [by] CARS is inconsistent with the scheme legislation,” he said.

“Any undermining of such a fundamental underpinning of the scheme in its current or any future reform risks undermining the sustainability and fairness of the scheme.”

Before Allianz agreed to settle the matter, Mr Larriera set up a petition on Change.org that has attracted 9888 supporters.