The State Government has welcomed the move by private insurers, AAMI and SGIC, to reduce CTP insurance premiums offered to private passenger vehicles and all light goods carrying vehicles, such as utes, to the lowest rate possible under full-competition.
It follows a similar move by competitor QBE who, earlier this month, also responded quickly by reducing its CTP premium rates for some classes from the highest rate possible to match the pricing of competitor Allianz.
“This now means that from August 30 this year, all four insurers will be charging the lowest possible CTP rate for cars and utes,” said Treasurer Rob Lucas.
AAMI’s new CTP rate of $296.77 for a private passenger vehicle in metropolitan Adelaide and the Hills (premium class 1) – to come into effect from August 18 – cuts $68 off its previously published rate of $364.75 and matches the pricing of both Allianz and QBE.
It has also matched Allianz and QBE by reducing its rate for private passenger vehicles in regional SA (District 2) to $201.03 (down $43.26), and light goods carrying vehicles in the metropolitan area/Hills and regional SA (used for business) to $359.92 and $225.22, respectively.
SGIC’s new CTP rates will apply from August 30 and cut $30.32 off its previously published premium class 1 rate (from $327.09 to $296.77), shave $19.30 off its previously published district 2 rate (from $220.33 down to $201.03). It has also matched its competitors’ rates for light goods carrying vehicles (used for business), as listed above.
Treasurer Lucas said the move was a ‘further boon for motorists’, who will save up to $114 a year on their CTP insurance premiums now that the market has opened to full competition (on July 1), driving down the cost of renewing a motor vehicle’s registration.
For a typical Adelaide household with 1.8 vehicles, this represents a saving of approximately $200 per household.
“This is excellent news for motorists who, quite clearly, are reaping the rewards of a new competitive market where insurers can compete on price, as well as service and other soon-to-be released policy holder benefits,’’ said Mr Lucas.
“Ultimately, this represents significant savings for an average Adelaide household of up to $200 a year.”
Mr Lucas said some households stood to save much more, with ABS data showing more than 74,000 South Australian households having three motor vehicles, while another 38,000 have four or more.
Under this new competition model, insurers can adjust their prices in any direction at any time within premium bands set by the independent Regulator. The new prices can only be implemented after a period of two months.