The NSW insurance regulator will move ahead with a $91 million clawback of excess profits earned by compulsory third party (CTP) insurers after receiving no appeals against the decision.

“My decision targets only pure profit taken by insurers, so does not affect the treatment, care or benefits of injured road users,” State Insurance Regulatory Authority (SIRA) CEO Adam Dent said.

“Excess insurer profit will be redistributed among motorists through a 35% reduction in a levy that forms part of the cost of a Green Slip.”

SIRA can control the level of insurer profit through a mechanism introduced in the 2017 CTP reforms, but this is the first time it has been used to recoup excess earnings. The long-tail nature of the scheme makes predicting future claims costs uncertain.

“I have targeted insurer profit above 10% on claims lodged in the first accident year of the new scheme,” Mr Dent said.

“It is likely that insurers made excess profit in other accidents years, so I expect that I will need to reactivate the mechanism in the next assessment cycle.”

The 2017 reforms also introduced innovation incentives, allowing insurers to apply to retain up to 3% of profit on Green Slips for investment in measures that improve road safety or lead to better outcomes for injured workers.

Preliminary approval has been granted to one insurer in the current assessment for an innovation focused on clinical and recovery management, with a final decision to be made on the profit retention after measurable benefits to injured people have been delivered.

“For the next assessment cycle, I expect insurers to place a stronger focus on innovation to improve recovery outcomes for people injured on the road,” Mr Dent said.

Motorists can expect to save an average of $19 when they take out a policy from January 15, according to SIRA, which will undertake its next assessment of insurer profits next year.