Insurers have outlined motor premium rises of up to 6% as COVID-wary commuters shun public transport.

The House of Representatives Standing Committee on Economics hearing in Canberra late last month was also told that large numbers of natural catastrophe claims, rising reinsurance costs and more expensive parts and repairs are playing a part in rising costs.

Allianz Australia MD Richard Feledy told the committee his company has “a 6% rate increase flowing through our motor portfolio at the moment”.

“Motor insurance was significantly impacted, as part of the 11 [catastrophe] events last year, certainly for our organisation,” he said.

“That’s just one of the components. I’d also call out that, nationally, we have seen an increase in claims frequency. Collision frequency is back to pre-COVID levels and, in many states, slightly higher.

“Anecdotally, there’s an argument that people are resisting using public transport and a lot more people are using their cars to commute.

“So we did see a ‘return to normal’ collision frequency towards the tail end of last year as the nation came out of lockdown.”

Suncorp and QBE both reported motor premium increases of 3-5%.

Suncorp CEO Insurance Product & Portfolio Lisa Harrison told the committee hailstorms are a serious concern.

“As we all know, we’ve had quite significant hail, whether it be in Canberra over the last couple of years or in Queensland through Springfield.

“That makes up a portion of the premium and reasons for the increase. Other things we factor in are parts [price] inflation as well as wage inflation for repairers.”

QBE CFO Chris Esson agreed the increasing cost of parts is a problem.

“To provide an example here, 10 or 15 years ago bumpers were pretty much just a piece of plastic,” he said. “Now you tend to have sensors based within them, and often there will be cameras located within the bumpers somewhere.

“So what would have been a relatively innocuous claim sometime ago is now much more expensive.”