The Insurance Council of Australia (ICA) and the Motor Trades Association of Australia (MTAA) jointly announced last week that the motor industry’s new draft national repair code of conduct is open for public consultation. It follows a review of the Motor Vehicle Insurance and Repair Industry Code of Conduct (MVIRIC) by Dr Michael Schaper in 2023.
If Schaper’s recommendations are fully implemented, they could have a significant impact on how many insurers and their repairers deal with motor claims.
“This consultation is a critical opportunity for stakeholders,” said MTAA CEO Matt Hobbs. He’s also called this reform process “a pivotal moment for the sector.”
“We want everyone to have their say,” said George Manos, the ICA appointed chair of the Code Administration Committee (CAC).
The upcoming Claims Leaders Summit in Sydney will focus on the claims area, including issues impacting the motor repair sector. AAMC is sponsoring one of the workshops. The firm provides accident management and assessment services for the commercial motor insurance and broking sectors.
“The MVIRI Code is important to us as it reinforces best practices within the motor body repair industry and insurance sector,” he said. “AAMC supports initiatives that promote transparency, consistency and fairness.”
Lukich was also pleased the draft Code is looking at the challenges of artificial intelligence (AI).
“It’s encouraging to see the Code evolving to address emerging technologies like AI,” said Lukich.
Part three of the draft document, Relationship between insurers and repairers, says Code approved assessors can use AI and other technology but must act with care and ensure proper policies are in place to provide oversight of any documents produced by generative AI tech.
Lukich and his firm will be on hand at the Summit to discuss other challenges facing the motor claims space. The industry veteran said the ongoing rising cost of repairs continues to be an issue.
“The increasing cost of vehicle repairs, driven by the complexity of modern vehicles - especially EVs [electric vehicles] and advanced driver safety systems - is putting pressure on claims costs and, in turn, higher premiums for the consumer,” said Lukich.
Regulatory compliance is another obstacle.
“Insurers must navigate complex and evolving regulations from authorities overseeing claims handling, consumer protection, and data privacy,” he said. “Staying compliant while maintaining efficiency can be a challenge, especially with increasing scrutiny around AI-driven decision-making.”
Another challenge, familiar across the industry, is increasing expectations from customers.
“Policyholders and brokers expect faster, more transparent claims processes, in line with how other financial institutions have successfully adopted digital solutions,” said Lukich.
However, he said integrating new technologies and ensuring a seamless customer experience can be difficult, “especially for legacy systems.”
Last year Lukich’s firm announced a new initiative that aims to deal with some of these challenges, particularly those impacting heavy vehicles.
“Six months in, Land + Road is already making a positive impact in the heavy motor and farm machinery claims space,” he said. “We’re seeing several underwriters clearly benefiting from faster response times, shorter claims life cycles and a noticeable reduction in negative broker feedback—all key challenges we set out to address.”
He made 15 recommendations, including sanctions for Code breaches and ensuring Code language is “legally rigorous.”
The report’s data also demonstrated the key role of insurance firms in Australia’s smash repair sector.
“There are an estimated 4,500 repairers providing these [car repair] services, with almost all of this work ultimately funded (in whole or part) by insurance firms,” said the report. “Each year, some 1.5 million smash repairs are documented in Australia, and they form the single biggest group of consumer retail claims in the Australian insurance industry.”
However, Schaper’s executive summary also said that, in recent years, the number of parties using the Code “appears to have declined significantly.”
