Queensland insurance coverage firm RACQ will now not provide obligatory third get together (CTP) to drivers, blaming years of great monetary losses.
RACQ chief govt officer David Carter mentioned the scheme was now not viable after 20 years of offering the service to greater than 25,000 individuals injured on Queensland roads.
“The scheme’s design allows for all participating insurers to be profitable; however, this assumes an equitable distribution of risk,” Mr Carter mentioned.
“In recent years, RACQ’s risk profile has worsened through no fault of our own, resulting in significant losses for the club.”
CTP premiums are set by the Motor Accident Insurance Commission (MAIC).
A spokesman for Queensland Treasurer Cameron Dick mentioned Queensland drivers wouldn’t should be involved about their premiums going up due to RACQ’s choice.
“The participation of an individual insurer in the CTP scheme will have no impact on premiums paid by Queensland drivers or the viability of the scheme itself,” the spokesman mentioned.
RACQ mentioned it could cease providing CTP insurance coverage cowl from October 1, whereas all present RACQ CTP insurance policies would stay in place.
The motoring physique says evaluation confirmed there was a major distinction between probably the most worthwhile and least worthwhile insurers within the scheme over the previous 5 years.
Mr Carter mentioned for each $100 of premium RACQ obtained in 2022, $123 was paid out in claims.
He mentioned this was because of the elevated frequency and severity of claims that the membership obtained relative to the scheme common.
“We saw little change in FY23 and in the absence of any changes to the way premium is shared between insurers, the outlook shows no signs of material improvement,” Mr Carter mentioned.
Mr Carter mentioned the RACQ choice to withdraw from the scheme was not taken evenly, however after a number of years of critiques by the state authorities and MAIC, it finally determined to drop the service.
“Premiums paid by Queensland motorists are fair and do not need to increase and should not increase now because RACQ has withdrawn from the scheme,” Mr Carter mentioned.
“However, following several years of raising concerns with the state government and MAIC, it’s clear that even the most recent scheme review is unlikely to achieve a level playing field or restore fairness across the insurers.
“The unfortunate reality is despite the extensive steps we have taken over many years to improve our position, including support provided by our reinsurance partners, it is no longer viable for us to continue participating in the scheme.”
Mr Carter mentioned the choice wouldn’t compromise or trigger any disruption to CTP claimants with a claims course of below means or who could have a declare sooner or later.
“RACQ will continue to provide a claims management service to ensure our existing CTP claimants continue to receive the same high standard of service we are known for, even after our exit from the scheme,” he mentioned.
Queensland motorists with RACQ CTP insurance coverage will probably be transitioned to a different insurer on renewal of their registration over the next 12 months.
Source: www.perthnow.com.au
