State Insurance Regulatory Authority has announced a clawback $183.1 million in excess profit from the six green slip insurers. Over the past 3 years, it has clawed back over $452 million to help keep green slips affordable.
Where does excess insurer profit go?
This year’s excess insurer profit of $183.1 million will go into the Motor Accidents Operational Fund (MAF). Motorists currently pay a Fund Levy with each green slip. Part of this is the MAF levy, which pays for public hospitals, ambulance services and administration costs of the CTP scheme.
The current clawback will help offset levy increases and maintain green slip savings achieved last year.
What are excess insurer profits?
SIRA sets a benchmark profit margin of 8% and uses the clawback mechanism if insurer profits rise above 10%. Any profits above 10% go towards reducing the MAF levy.
So far, motorists have received a $15 levy discount in 2021, an increased $29 levy discount in 2022 and this was maintained in 2023.
Insurers increasingly have a better idea of the volume and cost of claims under the 2017 CTP Scheme and how to price green slip premiums. This means the need for clawback of excess profit should reduce over time.
What is the average price of a green slip?
During 2023, green slip prices were around $29 lower because of the last clawback of excess insurer profit. This discount will be maintained over 2024.
The average greenslip price during 2023 was $568.