ASIC Warns Insurers Over Lack of Premium Hike Transparency

The Australian Securities and Investments Commission (ASIC) has warned car insurance providers after a review found premiums rose by 8 percent in the year to July 2025, significantly outpacing the 3 percent broader inflation rate. The regulator examined eight insurance brands controlling 72 percent of the market and found that none adequately explained premium calculations or price changes to customers, often providing only generic explanations or none at all.

ASIC found that insurers frequently obscured savings of 10 to 20 percent available to customers who pay annually rather than in installments. The regulator also noted that approximately one in three customers who contacted their insurer before renewal secured a lower premium without changing their policy, suggesting companies rely on customer inaction. While ASIC stated the findings do not prove price gouging, it emphasized that communication practices are falling short.

The Insurance Council of Australia defended the increases, citing a 47 percent rise in motor claim costs since 2020 driven by extreme weather, insurance-linked taxes, and higher repair costs. This includes a $243 million car theft bill in Victoria in 2025. The council stated it is now exploring ways to clarify premium explanations and develop an enforceable code of conduct.

This regulatory scrutiny coincides with ASIC's legal action against the Royal Automobile Club of Queensland for allegedly sending misleading comparison pricing to thousands of customers.