Australia’s domestic motor insurance class is posting record underwriting profit – but a rising claims trajectory beneath those numbers, combined with new behavioural research identifying a predictable daily incident window, presents a more complex picture for brokers advising personal lines clients. Net claims incurred in the domestic motor class rose from $2.34 billion in the March 2024 quarter to $2.86 billion in March 2026 – a 22% increase over two years – based on Australian Prudential Regulation Authority (APRA) data, with the December 2025 quarter recording the highest single-quarter claims figure in the dataset at $2.88 billion. New research from insurer Youi now points to a specific behavioural mechanism behind part of that frequency trend.
Youi’s Project 3PM study, which surveyed 2,334 drivers aged 18 and above across all states and territories in early August 2026, found that more road incidents occurred around 3pm than at any other hour of the day, based on Youi’s internal claims data covering the 12 months to November 25, 2025. Some 55% of respondents identified 3pm as the most stressful time to drive, and 24% reported involvement in a road incident during that window in the past year.
The most analytically relevant finding is not the 3pm spike alone, but the gap between how drivers perceive their own risk and how they actually behave. While 84% of respondents rated their own driving as safe during the afternoon peak, only 42% extended that same confidence to other drivers. When attributing cause for a personally experienced incident, 44% blamed another driver’s behaviour, against 26% who cited rushing, 22% who cited fatigue, and 19% who cited mobile phone use. Road Sense Australia notes that drivers consistently overestimate their driving skills and perceive crashes as unlikely – a tendency described as the illusion of invulnerability – despite research indicating that more than 95% of crashes occur due to human error.
For brokers, the implication is direct: clients who systematically underestimate their own risk are less receptive to premium increases and less likely to engage with risk advice. The Australian Securities and Investments Commission’s (ASIC) Report 838, released in August 2026, found that motor vehicle insurance premiums rose 8% in the 12 months to July 2025 and that car insurance was the most complained-about insurance product in 2024-25, with premiums the primary driver of complaints. Brokers who can connect premium levels to measurable, behaviour-linked risk data are better placed to hold those conversations than those who cannot.
The study moves beyond attitudes to document concrete behavioural changes under time pressure. Of 2,334 respondents, 43% reported feeling too fatigued or mentally drained to fully concentrate around 3pm, and 62% acknowledged engaging in risky driving behaviours when running late. Specific behaviours cited under time pressure included: becoming impatient with other drivers (28%), accelerating through amber lights (19%), and exceeding the speed limit (18%).
Youi head of product - vehicle and lifestyle Marni Jackson said the afternoon window was a pressure problem, not a traffic problem. “The research shows 3pm isn't just another busy traffic period. It’s the point in the day where work, family, and household responsibilities all converge, creating a unique pressure point for drivers. What’s particularly concerning is that respondents reporting higher levels of pressure were more likely to report risky driving behaviours behind the wheel,” Jackson said. Road Sense Australia CEO Michael Fitzgibbins said that mental load before driving was an underappreciated risk factor. “When work, family, and school-pick-up pressures all converge, stress and distraction can quickly follow and influence driver behaviour. The safest decision during the 3pm rush is often made before the engine even starts,” Fitzgibbins said.
Gen Z drivers reported the highest road incident rate of any age group at 42%, followed by Millennials at 30%. Parents of school-aged children and frequent afternoon drivers reported elevated fatigue, risky behaviour, and incident exposure relative to the broader population. Youi’s 2025 Under the Hood Report found that almost one in three Gen Z respondents (32%) had previously made a car insurance claim, compared with 52% of Millennials and 56% of Gen X respondents.
The Insurance Council of Australia’s (ICA) motor insurance roadmap, released in March 2025, reported that average claims costs rose 42% between 2019 and 2024, with repair costs climbing 26% since 2022 and new car prices up as much as 39% since 2019. Younger drivers absorb those structural cost increases most acutely: under-21 drivers in Australia pay an average of $3,609-$3,794 per year for comprehensive cover, dropping to around $2,026 at age 25, according to Finder data from January 2026.
The behavioural profile in the Youi data – time-of-day pressure, fatigue, and distraction-linked speed behaviour – maps directly onto what usage-based insurance (UBI) products are designed to capture. Adoption in Australia has been gradual but is accelerating. At the 2025 ANZIIF Australian Insurance Industry Awards, Adica Insurance was recognised for conducting usage-based insurance trials aimed at reducing accidents – an indicator of growing industry-level engagement with behaviour-based pricing models in the local market.
Brokers recommending UBI products to higher-risk client segments will need to factor in two converging regulatory developments. First, APRA’s Prudential Standard CPS 230, which first came into effect on July 1, 2025, requires insurers to identify, assess, and manage operational risks arising from inadequate or failed internal processes and systems. For insurers using telematics or automated pricing platforms, the standard therefore adds an operational-risk governance consideration to the use of those technologies.
Second, from December 10, 2026, amendments introduced by the Privacy and Other Legislation Amendment Act 2024 will require APP entities to include specified information in their privacy policies where they use personal information in automated decision-making that could reasonably be expected to significantly affect an individual’s rights or interests. For insurers using automated systems in areas such as pricing, the changes add a new transparency consideration around how personal information is used in those decisions.
Together, these two regulatory timelines mean that insurers and brokers moving toward behaviour-based motor pricing in Australia are doing so inside a tightening compliance environment, not ahead of one. For brokers, that creates a near-term advisory case: clients in higher-risk behavioural segments – younger drivers, parents of school-aged children, and frequent afternoon commuters – are candidates for a risk conversation grounded in the Youi data and, where appropriate, a product conversation about behaviour-based pricing that accounts for both the potential premium benefit and the disclosure obligations that will apply from December 2026.
