Competition between compulsory third-party insurers in Canberra is heating up, with NRMA Insurance set to drop its premiums by 4 per cent after jacking up prices last December.
NRMA will offer the territory's cheapest CTP insurance from July 1 when it drops family car premiums by $23.40 to $565.20, following the lead of GIO, which dropped premiums by $23.90 in May to $568.60.
The ACT's compulsory third-party regulator reviews and approves all CTP premiums to ensure they are "not excessive" for customers but high enough for insurers to fully fund present and future claims, its representative, Karen Doran, said.
The move comes after the regulator approved a 1.8 per cent rise to NRMA's CTP prices in December, increasing family car premiums by $10.40 to $588.60.
NRMA had a monopoly on CTP insurance in the ACT until July 2013, but now competes with GIO, AAMI and APIA.
Ms Doran said the drop in NRMA's premiums provided "further evidence that competition is delivering real choice and benefits to consumers".
"Based on independent actuarial advice, I am satisfied that NRMA's new premiums are soundly based and are not excessive," she said.
GIO's ACT CTP portfolio manager Paul Lawton welcomed NRMA's price drop, but said it was the first time he could recall the insurer reducing its CTP insurance price.
"It's come as a response to the price cut GIO made in March," he said.
"GIO entered the ACT market to break the CTP insurance monopoly and provide better value for ACT motorists."
In March, AAMI also lowered its family car premiums by $8.20 to $590 while APIA decreased its premium by $1.20 to $595.
An NRMA spokesperson said its premium reduction was delayed to July because the "various" review processes "take some time".
She defended the December increase, saying it was the first rise in two years. Following continual reviews the company had been able to "find a saving".
"We want our CTP policies to remain competitive and we want to remain the insurer of choice for ACT drivers shopping for their CTP," she said.
CTP premiums for all ACT vehicles can be found at: apps.treasury.act.gov.au/compulsorytpi/premiums