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Transport Select Committee report on motor insurance misses the point says the ABI


Responding to the publication today (11 March) of the House of Commons Transport Committee report into the cost of motor insurance, Nick Starling, Director of General Insurance and Health at the ABI, said:

"This report is a missed opportunity. The Committee took a great deal of evidence, and has chosen to ignore much of it.

"The Committee has failed to recognise that the main cause of the recent increases in motor insurance premiums is ever- increasing personal injury claims and spiralling legal costs. These are often driven by claims management firms. The Committee should have called on the Government to implement in full the recommendations of Lord Justice Jackson's report into tackling the compensation culture. This will not only control excessive legal costs, but will speed up the payment of compensation to genuine claimants. Until this happens the cost of motor insurance will continue to rise.

"Legal costs alone now add an extra £40 a year to the average motor premium, and motorists should not have to foot the bill for our cost-ridden compensation system.

"The Committee is also wrong to say that referral fees should be more transparent. They are a symptom of a dysfunctional compensation system, not the cause of it. This is why the industry wants to go further than the Committee recommends and ban them altogether."


On the Committee's comments on tackling insurance fraud and young driver road casualties, Nick Starling commented:

"Insurers are also working hard to combat insurance fraud, including funding the Insurance Fraud Bureau, which works closely with the police in investigating organised motor insurance frauds.

"What the Committee has got right is to call for more action to reduce the appalling number of accident casualties among young drivers. The Government must act now to fix our failing driver training regime, through measures such as introducing a minimum learning period."


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Last updated 01/07/2016