James Dalton, Director, General Insurance Policy, ABIOn Valentine’s Day three years ago, representatives from leading motor insurers met with the Prime Minister at Downing Street to discuss how to bring down the then high premiums faced by businesses and families in the UK. Widely derided as a Valentine’s Day “love in”, it set the scene for a partnership that continues to this day.
The Prime Minister recognised that car insurance premiums were rising because of the unnecessarily high costs that existed in the motor insurance market. Take those costs out, said the insurers, and we will pass on savings to customers through lower car insurance premiums.
Trust is critical in any relationship. And the Government trusted that in a highly competitive market, insurers would deliver on their commitment. And insurers have delivered. The average car insurance premium has fallen around £50 over the last two years when the Government’s reforms took effect with around £600 million in lower premiums being passed on to hard pressed motorists.
And by working together, we are continuing to build on that progress. Insurers have long been of the view that improvements are needed to the system of medical reporting in whiplash claims. It cannot be right that a claimant lawyer can source a medical report from a doctor with whom they have a financial relationship. So that is going to stop. The Government have put in place the Civil Procedure Rules and the insurance industry is building an IT platform so that medical experts, with the appropriate accreditation, will be randomly allocated. MedCo will go live on 6 April.
But there’s a bitter aftertaste to the heart-shaped chocolates. The Government can do much more to remove unnecessary cost from the system. Despite considering that raising the small claims track limit for personal injury claims is the right thing to do, there’s been no action. Increasing the limit would both further reduce the cost of whiplash claims that continue to plague the UK and reduce premiums further.
Saving young lives
Despite committing at the Summit to act, there has been no meaningful action on reducing the number of accidents involving young people. Jurisdictions such as New Zealand, Australia, the United States and Canada have all implemented graduated driver licensing schemes which show a 20-30% decrease in crashes, casualties, and fatalities among young drivers. Northern Ireland is soon to implement a similar scheme. Throughout this Parliament, the lack of political will to even ask the public what they think and start the debate is a tragedy for Britain’s young people.
So just as in any relationship there have been ups and downs, but by working together the Government and insurers have delivered real change for Britain’s motorists who will be hoping that by next Valentine’s Day there is even more to celebrate.
James Dalton is Director, General Insurance Policy at the Association of British Insurers (ABI).