Four private insurance companies will provide Compulsory Third Party (CTP) insurance in South Australia from 1 July 2016, the first step towards a fully competitive mandatory insurance market in the state.
SA Treasurer Tom Koutsantonis says that motorists can expect payment processes for CTP to remain the same, despite being distributed among four private providers – QBE, AAMI, SGIC and Allianz.
“Importantly, this model provides a seamless transition for South Australian motorists. Under the market-based model, for the first three years CTP prices will be fixed to CPI-like increases,” Koutsantonis says.
“The Department of Planning, Transport and Infrastructure will continue to issue CTP insurance renewal notices as part of the vehicle registration process.”
“All motorists will have to do is receive their registration notice in the mail and pay how they normally would,” Koutsantonis adds.
Following the first three years, motorist will be able to change to a different insurer if it suits them to do so.
“In the fourth year motorists will be able to remain with their allocated CTP insurer, or choose to shop around for potential better offers,” Koutsantonis says.
“For example, insurers may offer the option to ‘bundle’ CTP insurance with other products such as home and contents or life insurance to provide motorists with even better value for money.”
Suncorp Commercial Insurance CEO Anthony Day says the decision to allow private insurers to provide CTP will boost investment and value for customers while also helping the government’s bottom line.
“It has been repeatedly demonstrated that a competitive market can bring additional investment, increase innovation and drive better value for customers,” Day says.
“Suncorp welcomes the opportunity to invest further in our South Australian operations, increase our workforce and build on our partnerships with the local community.”
“The decision by the South Australian Government to allow the private sector to provide CTP insurance will boost the state’s economy and free up capital that can be reinvested in the core business of government,” Day adds.
QBE General Manager CTP and Motor Trades Steve Rivers also welcomes the change, saying that the company is pleased to be working alongside the South Australian government.
“QBE is very pleased to have this opportunity to work with the South Australian Government as they take this step to privatise their CTP market,” Rivers says.
“We are extremely proud to be part of the Government of South Australia’s longer-term vision to build CTP insurance that meets the needs of the South Australian motoring public and the broader South Australian community.”
Meanwhile, Zurich has announced it is exiting the CTP market in NSW from March next year.
Interim CEO Rajbir Nanra says the decision follows a review of its long-term strategy.
““Zurich is a commercial insurer specialising in providing innovative insurance solutions to small to medium sized enterprises, large corporations and multinational corporate groups,” he says.
“The decision to withdraw from the NSW CTP Green Slip scheme is driven by Zurich’s strategy to use its capital strength to focus on business lines in which we have particular expertise and a distinct market position.”