Allianz argues no evidence to back move to charge riskier drivers more in CTP

ALLIANZ says idea of charging riskier drivers more for CTP insurance is triumph of theory over reality, with no evidence to back the move.

CTP, which covers some injuries in accidents, is under review.

ALLIANZ says a plan to charge riskier drivers more for compulsory third-party insurance is a triumph of theory over reality, arguing there was no evidence to back the move.

A State Government-backed committee has floated the idea of being able to charge riskier drivers more — within a set band of prices — compared to the current system where all car drivers pay the same.

Such an approach could potentially spur “better outcomes for motorists”, the committee said.

Still, the committee admitted it was “difficult to predict the extent to which the level of CTP premiums would directly influence driver behaviour, noting the evidence on this is limited”.

The government is reviewing various committee recommendations but Allianz, one of the four insurers in Queensland’s CTP system, rejected the risk-premium idea.

“There is no evidence that modestly higher premiums for less capable or safety conscious drivers has any impact on driver behaviour or accidents that translates into improved CTP claims experience. The current … approach underpins Queensland’s position as the leading State in terms of (CTP) affordability,” Allianz told The Courier-Mail.

But fellow CTP insurer QBE supported such risk ratings, saying it would encourage competition and “allow insurers to reward safer drivers with lower premiums”.

Insurer profits are the committee’s main target in recommendations, with it urging the government to take “immediate action”. Insurers have been reaping up to four times more profits than the scheme intended, according to regulatory data.

The committee said one technique to slim profits would be by targeting forecasts used in quarterly reviews of allowable prices.

Tinkering with some assumptions, such as economic parameters, might help limit “future excess insurer profitability”. But the committee ruled out toying with assumptions on claims frequency and average claim cost, saying the forecasts already underwent robust assessment.

To address a lack of data on solicitor costs for dealing with injured people’s CTP claims, the committee backed a proposal from the Queensland Law Society and Australian Lawyers Alliance to voluntarily supply costs from a random number of claims.

ALA national director Rod Hodgson said the committee’s report was “fair and balanced”, and that lawyers would speak with authorities about the data-gathering plan.

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