Global Markets · Australia
The Most Completely Itemised Account Of The Cost Tail.
The Insurance Council of Australia's 2025 policy paper is the best public account anywhere of where motor claims cost actually accrues, because it itemises the categories other markets discuss only in aggregate.
The Headline Position
Comprehensive motor premiums in Australia rose 42% between 2019 and 2024, reaching an average of $1,052 a year in 2024. Average claims cost rose 42% over the same period, tracking premiums exactly. Insurers' motor claims costs as a proportion of premiums collected rose from 89% in June 2019 to 94% in June 2024, indicating declining underwriting profitability rather than expanding margin. (Insurance Council of Australia, Motor Insurance Policy Paper: A Roadmap For Reducing Rising Premiums, 23 March 2025. Australian dollars.)
| Driver | Change | Detail As Published |
|---|---|---|
| Repair costs | +26% | Since 2022, on rising wages, more expensive parts and longer repair times. Repair now roughly 60% of claim cost. |
| New car prices | +39% | Since 2019. Used car values about 32% higher. Write-offs are around a quarter of all claims costs. |
| Rental car cost to insurers | +70% | Since 2019. Attributed to extended repair wait times and to the growth of credit hire firms. |
| Credit hire claims volume | 4x | Quadrupled since 2019, and on average three times more expensive than standard claims. |
| Motor insurance fraud | $560m | Cost to the industry in 2023, including staged accidents and misrepresentation of damage. |
| Claims cost as share of premium | 89% → 94% | June 2019 to June 2024. |
Three of those six lines are duration costs. Rental accrues per day and is explicitly tied by the ICA to repair wait times. Credit hire is a market that exists because the wait exists. Towing and storage are the subject of the ICA's call for enforceable fee caps across all Australian jurisdictions, citing Queensland and Western Australia as examples. (Insurance Council of Australia, 23 March 2025.)
The Workforce Constraint
Australia reports the same labour problem as North America in different terms: nearly one in two vacancies in motor trades businesses relies on overseas workers because of chronic skills shortages, and only 58% of apprentices complete their qualifications. The ICA also argues for extending Australia's Motor Vehicle Information Scheme so independent repairers have fair access to parts as well as to service and repair information. (Insurance Council of Australia, 23 March 2025.)
Supervision
The Only Market Here Where Claims Handling Is A Licensed Activity
Australia is distinctive, and it matters to any technology supplier. Following the Financial Sector Reform (Hayne Royal Commission Response) Act 2020, claims handling and settling became a financial service under the Corporations Act 2001 from 1 January 2021, and from 1 January 2022 persons providing claims handling and settling services have been required to hold an Australian Financial Services licence. (Australian Securities and Investments Commission, Information Sheet 253.)
The practical consequence is that in Australia the act of handling a claim is itself a regulated, licensed service carrying general obligations — efficiency, honesty and fairness among them. A supplier whose technology touches that process is touching a licensed activity, not an unregulated back office. The full Australian framework is set out here.