The Insurance Council of Australia (ICA) has expressed support for recent proposals from the Coalition that aim to enhance economic competitiveness and reduce regulatory load on financial service providers.
These measures, the ICA said, could support improved insurance accessibility while addressing cost and efficiency challenges across the sector.
The ICA has welcomed the Coalition’s commitment to overhauling the Corporations Act 2001 to simplify financial services legislation and cut compliance overheads.
The organisation believes these changes would reduce friction in insurance delivery and provide consumers with better access to coverage options.
“We support the Coalition’s commitment to reform capital markets and reduce regulatory costs in financial services to ensure Australians can more easily obtain the insurance coverage they need,” said ICA CEO Andrew Hall. “Ensuring a right sized regulatory framework is in place will support better access to critical financial services for all Australians throughout their lives.”
Additionally, the ICA noted the Coalition’s intention to alleviate skills shortages in critical industries – particularly in the motor repair supply chain – as essential to ensuring timely claims resolution and controlling escalating costs in motor insurance.
Hall noted that labour expenses now comprise roughly 30% of claim-related costs in motor insurance.
“Investing in apprenticeships and training will ensure supply chains remain strong, and particularly across the motor supply chain where labour costs now contribute around 30% of claims costs,” he said. “Continuing to bolster the workforce across the sector will also improve repair times, which have increased to an average of over 61 days, up from 38 days in 2019.”
These developments align with the ICA’s latest report, “Motor Insurance Policy Paper – A Roadmap for Reducing Rising Premiums,” which outlines sector-wide cost drivers and offers a blueprint for regulatory and policy reform.
According to the paper, average comprehensive motor insurance premiums have increased by 42% since 2019, with annual premiums now surpassing $1,050. This trajectory has mirrored a corresponding rise in claims expenses, driven by costlier repairs, limited labour availability, and increasing vehicle complexity.
The ICA found that repair costs alone have surged 26% since 2022, contributing to around 60% of total claim expenses. Vehicle write-offs, which represent about one-quarter of all claims, have become more expensive as the cost of new and used vehicles has climbed – up to 39% and 32% respectively since 2019.
