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ASIC’s Report 838, Road testing transparency in car insurance premiums, identifies material gaps between the information consumers receive and the information ASIC considers it needs to understand, compare and question premium outcomes. The report provides a clear indication of ASIC’s ongoing supervisory focus on insurance pricing and the practices likely to attract regulatory scrutiny.
The review was conducted against the backdrop of:
- an average 8% increase in motor vehicle insurance premiums during the 2024–25 financial year, and an increase of more than 42% in the average cost of comprehensive cover between 2019 and 2024; and
- ASIC and AFCA complaints data showing that general insurance being the most complained-about product category in ASIC’s internal dispute resolution data, with 56% of those complaints relating to comprehensive motor vehicle insurance. AFCA data separately showed motor vehicle insurance accounted for 33.81% of general insurance complaints between 1 July 2025 and 31 March 2026.
Scope of ASIC’s review
ASIC examined quote, renewal and related policy documents issued to 320 consumers by five insurers across eight brands, representing approximately 72% of the Australian motor vehicle insurance market. ASIC also commissioned a representative survey of more than 2,000 consumers in January 2026.
The review focused on the amount and composition of premiums, the factors affecting them, year-on-year changes to premiums and policy settings, and the cost consequences of paying annually or by instalments.
ASIC’s central finding is that current renewal documents often do not give consumers enough information to understand why premiums have changed or assess whether renewal represents value. Further, more than 30% of consumers who contacted their insurer were able to negotiate a lower premium without reducing their cover. That finding raises questions about the governance and consistency of retention and discretionary discounts. It is also inconsistent with the general view among survey participants that contacting their insurer would not result in a change to the renewal premium.
The table below summarises ASIC’s findings on poor practice and its recommendations for better practice by insurers.
| Subject | Poor practice | Better practice |
|---|---|---|
| Explanation of premium calculations | Quotes and renewals do not explain what affects the premium or why it increased. Explanations are generic, not specific to the consumer. | Clearly explain the main factors affecting the premium and the reasons for any yearly change, using simple, personalised information. |
| Consumer engagement at renewal | Renewal documents do not help consumers assess value, review their cover or compare other options. | Give consumers clear information to assess value, review key policy settings and compare options before renewing. |
| Negotiated and discretionary discounts | Lower premiums are mainly offered to consumers who contact the insurer and negotiate, leading to inconsistent outcomes for similar consumers. | Use clear rules and oversight for retention and discretionary discounts so pricing is fair, consistent and justified. |
| Cost of payment by instalments | Renewal notices do not clearly show that instalments may cost 10–20% more than annual payment or how much consumers could save by paying annually. | Show the total cost of paying annually or by instalments, the difference between the two options, and any additional charge or saving. |
| Year-on-year comparisons of all material information | Renewal documents do not clearly compare changes to excesses, insured values and other key terms, or the information is spread across several documents. | Provide one clear year-on-year comparison of premiums, excesses, insured values and other important changes in the main renewal document. |
Why the report matters
Report 838 should also be considered in light of ASIC’s ongoing enforcement action against several insurers concerning allegedly misleading pricing information and failures to honour pricing promises. Current proceedings include allegations of misleading year-on-year premium comparisons in renewal documents and failures to apply advertised discounts. The report, read with ASIC’s current enforcement activity, indicates that pricing representations and premium disclosures will remain an area of supervisory and enforcement attention.
What insurers should do now
Insurers should review their quote and renewal communications against ASIC’s poor- and better-practice examples. Priority areas include personalised explanations of material premium drivers, clear comparisons of annual and instalment payment costs, and side-by-side disclosure of changes to premiums, excesses, insured values and cover. Importantly, insurers must be able to substantiate these disclosures as genuine drivers of price. Representations that cannot be supported by evidence may expose insurers to enforcement action for misleading or deceptive conduct.
Product, legal, compliance and customer communications teams should test whether key information is prominent in the documents consumers actually use, rather than dispersed across supplementary material.
Any additional cost for payment by instalments should be supportable and accurately described. Insurers should be able to justify, with evidence, why a loading applies and should describe it accurately in customer-facing material. Insurers should also consider whether the additional cost is properly described as an instalment loading or whether the pricing structure instead reflects a discount for paying annually. The distinction matters because an inaccurate description may be misleading or deceptive.
Underwriting and pricing teams should examine the governance surrounding discretionary and retention discounts, including whether comparable risks receive materially different outcomes depending on a consumer’s willingness or ability to negotiate.
Our Regulatory and Corporate team has experience reviewing consumer-facing insurance documents and advising on disclosure, pricing representations and associated governance. Please get in touch if you would like support in reviewing your renewal practices, pricing methodologies and associated customer documents.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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