What evidence, if any, does the ACC rely on when implementing engine capacity-based pricing for motorcycle levies?

Answer

I am advised that engine capacity is a transparent and administratively workable method to classify motorcycles for levy purposes and has been used as the basis for motorcycle risk classes for many years. ACC’s claim data, matched to NZTA’s Crash Analysis System data, shows a strong correlation between claim costs and cc rating. Claims involving higher cc motorcycles showed substantially higher lifetime costs. Levies charged by ACC are intended to cover the lifetime cost of claims and so cc rating has been used to differentiate levies. The degree of the correlation has been used in determining relative risk for motorcycle classes. This analysis does not imply causation, nor does it conclude that this is the only basis on which to differentiate cost. I am further advised that any data used to price levies needs to be reliably available in both the exposure and the claims datasets. Engine capacity provides a consistent and practical way to group motorcycles that show materially different cost profiles in line with the Accident Compensation Act’s requirement to set motor vehicle levies based on risk. Further information on motorcycle levy setting can be found at: www.shapeyouracc.co.nz/assets/Consult-docs/2024/20240630-Pricing-Report-2026-2028-Motor-Vehicles-Account-final.pdf