It has been revealed that insurers have slugged Sydney drivers an extra $100 to make up for poor returns on investments, even though crash and theft rates have fallen dramatically.
Premiums have increased at up to 10 times the rate of inflation, figures obtained by The Daily Telegraph show.
The price of the average greenslip rose 14 per cent last year and comprehensive cover increased five per cent.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Yet Sydney's overall price inflation was just 1.3 per cent during that time.
Theft down nine per cent
When premium increases are compared to crash and theft rates the differences are even more stark. The most recent accident statistics show a six per cent annual fall, while car robberies declined nine per cent.
KPMG insurance group head Brian Greig said: "The returns they were able to generate pre-global financial crisis were substantially higher than they are now. When that (investment) lever is a little flat they look at other levers to generate acceptable returns, because sharemarket analysts are always on to them to achieve that."
The main "lever" is premium increases.
"Insurers are using premiums to compensate for lower investment returns," said Damian Smith, CEO of insurance comparison service RateCity.
