ICA Proposes Measures to Mitigate Escalating Motor Insurance Premiums

The report reveals that the average comprehensive motor insurance premium reached $1,052 per year in 2024, up from $741 in 2019. This significant rise is attributed to several factors, including increased claims costs, higher repair expenses, and the growing complexity of vehicle technology.

Key findings from the report include:

• Claims costs have risen by 42% between 2019 and 2024, reflecting higher expenses for vehicle replacement, parts, and labour.
• Repair costs have climbed 26% since 2022, driven by rising wages, more expensive spare parts, and longer repair times.

The ICA emphasises the need for a collaborative approach involving insurers, government bodies, and industry stakeholders to implement strategies that can effectively mitigate these rising costs. Proposed measures include:

• Enhancing vehicle repairability through design improvements and standardisation.
• Investing in advanced driver-assistance systems (ADAS) to reduce accident frequency and severity.
• Streamlining claims processes to improve efficiency and reduce administrative expenses.

By addressing these systemic cost drivers, the ICA aims to stabilise and potentially reduce motor insurance premiums, ensuring affordability for Australian motorists while maintaining comprehensive coverage options.