Reforming the NSW third-party motor insurance scheme could shave $97 from the average premium next year, according to a report on the impact of switching to a no-fault program.

The “greenslip” scheme’s costs could be cut by moving to statutory defined benefits for claimants and reducing the role of lawyers, program actuary Ernst & Young says in a paper for the Motor Accidents Authority (MAA).

Defined benefits would provide more certainty than payments via legal settlements.

The average premium for class-one vehicles – the most common class – would be $571 without the proposed reforms or $474 with them.

But claims management by the seven insurers involved in the scheme will affect statutory benefit costs, the report says.

“Management of claims under statutory benefits will require a change of mindset, and significant change in insurers’ claims management, from an adversarial approach to achieve the optimal financial settlement to one that focuses on achieving better health outcomes.”

The reforms would give the MAA powers to restrict insurers’ expenses.

A separate report by Ernst & Young discusses how the authority could “guide” the seven insurers’ premiums during the transition, to stop them making excessive profits.

“Insurer profits will reduce in line with overall scheme costs,” the analysis says. “Insurer profits will be managed through the new legislative powers of the MAA.”

The reforms have similarities with Victoria’s scheme, but NSW would retain some common law access.

At-fault claimants would be entitled to more benefits and work capacity tests would be introduced. Payment of treatment costs would stop after five years in most cases.

Ernst & Young says savings from legal fees, capping insurers’ expenses and paying benefits on a reasonable and necessary basis should be more than sufficient to offset the rise from paying benefits to about 7000-8000 at-fault claimants.

The reforms have stalled because the State Government does not have the numbers to get the legislation passed.