The Insurance Council of Australia (ICA) will engage with the motor crash repair industry over concerns that businesses are being brought to the brink of collapse by insufficient payments and surging costs.

The Motor Trades Association of Australia (MTAA) said last week that it had written to ICA seeking a summit to resolve the issues.

ICA says it is of critical importance that Australia has a sustainable and thriving motor vehicle repair industry.

“Insurers recognise and value the role and work of motor vehicle repairers, it is in all participants; customers, repairers, insurers and suppliers’ interest to ensure the motor vehicle repair industry operates effectively and efficiently,” a spokeswoman told insuranceNEWS.com.au.

“ICA will engage directly with the MTAA to better understand the issues, however, it would not be lawful to collectively discuss commercial arrangements as proposed by a summit.”

Commercial arrangements and contracts are open to periodic review and are confidential discussions held between insurers and repairers to abide by the Australian Competition and Consumer Commission’s pricing and competition guidelines, ICA says.

The MTAA says unsustainable cost containment business practices by insurance companies are compounding issues faced by businesses as covid worsens supply chain pressures.

Businesses are dealing with skills shortages and ballooning labour, parts and materials costs, and adapting to changing technology and materials in new cars, CEO Richard Dudley says.

“Collision repairers have exhausted productivity improvements, and cost absorption strategies across all expense areas of their business and enough is enough,” he said.