Suncorp and Allianz have declared their interest in entering SA’s compulsory third party (CTP) motor vehicle market, which is to be opened to private insurers.

State Treasurer Tom Koutsantonis says the Government will call for private tenders in 2016.

Insurance is currently offered by the Motor Accident Commission. Privatisation will allow the state to divert $500 million from the commission.

SA will become the fourth state or territory, along with NSW, Queensland and the ACT, to have private sector underwriting of CTP cover.

Suncorp Commercial Insurance Statutory Portfolio EGM Chris McHugh says the group is in the race.

“Suncorp intends to examine the opportunities available from the privatisation of the SA CTP market,” he told insuranceNEWS.com.au.

“We are well placed to expand our business as opportunities present themselves.”

SA’s CTP scheme is a public-private hybrid: the Government underwrites the scheme, but claims are managed by Allianz.

Allianz Australia spokesman Nicholas Scofield says the insurer welcomes privatisation.

“In this day and age [underwriting insurance] is an entirely unnecessary business activity for governments to be engaged in.

“We will certainly be putting our hand up to participate in the scheme, as we would assume other major insurance companies that operate in the market in Queensland and NSW will be.”

QBE Australia also backs the privatisation.

CEO Colin Fagen says the move “aligns with our view that insurance is not governments’ core business”.

“In our experience, privatising this scheme and enabling competition in the SA market will lead to more innovation… and will benefit both the local economy and consumers,” he told insuranceNEWS.com.au.