Rising repair and claims costs are pushing commercial motor fleets further apart at renewal and what separates them is increasingly what a fleet can evidence about its own risk. Cynthia Yap (pictured), managing director of Perth based Dynamic Insurance Services, said the cost of claims is a main driver of this divergence.
"One of the biggest challenges in commercial motor at the moment is the increasing cost of claims," said Yap. "Vehicles are becoming more expensive and technologically complex, which means even relatively minor accidents can result in significant repair costs."
The trend is not new but what has changed in recent years is its scale.
The Insurance Council of Australia (ICA) found that repair costs climbed 26% since 2022, driven by higher wages, more expensive spare parts and longer repair times, according to its Motor Insurance Policy Paper published in March 2025. Repair bills now account for roughly 60% of total claim costs and the ICA has asked governments for coordinated action on those structural drivers through its roadmap for reducing rising motor premiums.
The same paper recorded average claims costs rising 42% between 2019 and 2024, and insurers' motor claims costs as a proportion of premiums collected moving from 89% in June 2019 to 94% in June 2024. Premium increases across that period did not restore the margin they were meant to protect.
Vehicle technology is a significant part of why. Yap pointed to the equipment that now sits behind an ordinary panel.
"Modern vehicles also contain increasingly sophisticated technology, including cameras, sensors and advanced driver-assistance systems, which can require recalibration after an accident," she said.
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That recalibration requirement applies across vehicle types and is not confined to prestige or electric vehicles, a point examined in this analysis of why motor claims inflation is structural rather than powertrain-driven. A light commercial vehicle specified with lane-keep assist and adaptive cruise control carries a repair profile that did not exist in the same fleet five years ago.
Pricing has responded unevenly. Yap said the difference between the two ends of the market has grown pronounced.
"We're seeing a much greater difference between well-performing fleets and those with poor claims experience," she said. "In the current market, well-managed fleets can achieve premium reductions of up to 5%, while poor-performing or complex fleets can face increases of 5% to 15%."
Broker market reporting going back to early this year was also pointing the same way. Bellrock Advisory's January 2026 insurance market overview recorded small vehicle and small fleet policies commonly facing increases of 5% to 10%, with rising claims costs cited as the major driver and advanced driver assistance systems named among the causes. Heavy motor and large fleet operators, by contrast, were described as enjoying relatively stable pricing, with insurers offering incentives where businesses use tools such as GPS tracking and telematics.
Yap said insurers are responding to evidence rather than assertion.
"Insurers are increasingly interested in businesses that can demonstrate strong fleet management, driver training, telematics, GPS tracking and good claims management," she said. "A business that can provide insurers with quality risk information and demonstrate that it is actively reducing accidents becomes a much more attractive risk."
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Telematics is the most frequently cited of those inputs, though adoption has been uneven and the economic return has typically taken time to appear, as covered in this examination of how brokers can help motor fleets adopt telematics systems. What has changed is the treatment of fleets that decline to produce data at all.
Yap framed the broking role that follows from this as one of risk improvement rather than placement.
"For me, that's where a broker adds real value," she said. "It's not simply finding the cheapest premium - it's helping the client become a better risk and then using that information to create competition among insurers."
She also identified where the competitive opening sits for fleets that can meet that standard.
"We're also seeing greater competition among insurers for well-performing fleets," she said. "That creates an opportunity for brokers to remarket good risks, negotiate better premiums and excesses, and potentially obtain broader coverage."
The repair cost curve documented by the ICA is fixed for the medium term. The underwriting response to it is not and on Yap's account it is now shaped substantially by the quality of the risk information a fleet brings to the table through its broker.
