Katy Gallagher and Andrew Barr have the long awaited news that three new players are entering the Compulsory Third Party insurance market in the ACT:
Three insurers: AAMI, GIO and Apia (the Australian Pensioners Insurance Agency) have been granted licences to offer CTP insurance to ACT motorists. The licences will become effective on 1 July 2013. There is currently only one provider of CTP in the ACT.
“Today’s announcement is great news for Canberra motorists,” Treasurer Andrew Barr said. “Competition in our CTP market will bring the obvious benefit of choice.
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“Competition also offers greater opportunities for innovative insurance products, more investment and employment in the ACT, and new thinking about how people injured in a motor vehicle accident might be rehabilitated and returned to health.
“We have had a single insurer in the ACT for more than three decades, and it is great for Canberrans to finally have greater product choice.
UPDATE: The Canberra Liberals’ Brendan Smyth has expressed his pleasure and says this means he was right.
Further update: The Law Society is also very happy:
The Society welcomes the news that there will be three more CTP insurers in the ACT market.
The government is to be congratulated on the success of their 2008 reforms in making CTP insurance in the ACT profitable for insurers while maintaining a reasonable level of benefits for innocent victims of motor vehicle accidents.
A senior ACT Treasury official recently informed a legal seminar that the estimated average cost of claims following the 2008 reforms fell from a forecast $157,371 in 2012 to an actual cost of $36,689.
These raw figures indicate a much larger profit than was expected when premiums were set.
We expect that this has been a factor in attracting the new insurers to the ACT market.
The extra competition may well result in lower premiums and the funding of a no-fault catastrophic care scheme.