Claim farming reforms produce positive results

On 5 December 2019, the Motor Accident Insurance and Other Legislation Amendment Act 2019 commenced.

The Act aimed to stop the practice of ‘claim farming’ – car crash scamming – with a new offence prohibiting approaching or contacting members of the public to solicit or induce them to make a CTP insurance claim. The reforms also prohibit the giving or receiving of financial incentives for referring claims or potential claims.

On 23 March 2021, Insurance Commissioner Neil Singleton and Taylor Fry’s Peter Mulquiney delivered the Motor Accident Insurance Commission (MAIC) CTP Annual Risk Premium Review Meeting to industry stakeholders. The meeting provided an opportunity for MAIC to update stakeholders and provide insights into the effects of COVID-19 and claim farming reforms on claims, and emerging risks and trends in claims.

It highlighted the impact of the reforms on the sustainability of the CTP insurance scheme, 12 months after their introduction. While the estimated frequency of claims was affected by the impacts of the COVID-19 pandemic, nevertheless there appeared to be a trending decrease in the frequency of claims since the introduction of the reforms.

Key insights, according to the annual review conducted by Taylor Fry, include:

  • COVID-19 restrictions reduced road use, impacting the number of CTP claim notifications in 2020. Nevertheless, even adjusted for the impact of COVID, the number of claim notifications was 15% lower than forecast, suggesting that while the COVID-19 impact was large, it was smaller than the impact of claims farming reforms.
  • Since the last annual review, the risk premium has decreased $25 from $194 to $169.
  • Core claim frequency has decreased 11% since claim farming reforms were introduced, accounting for $22 of the risk premium decrease.
  • It appears that the reforms have reversed the increase in frequency of small non-serious claims that occurred between 2014 and 2017, although it is too early to see this conclusively in the available data.

The statistics presented at the annual review suggest that the claim farming reforms continue to have an impact on the sustainability of the CTP insurance scheme.


The legislation strengthened the powers of MAIC to investigate and prosecute those who engage in claim farming activity. Legal practitioners can continue to assist in stamping out the practice by reporting incidents of claim farming to MAIC. Car crash scammers can be reported via the MAIC website.

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