The Department for Transport and HM Treasury today published the Final Report and Actions from its Motor Insurance Taskforce. IE has rounded up some industry-wide comments;
Since it was formed in October 2024, the Motor Insurance Taskforce has worked across government departments and with our independent regulators to understand this complex market and to agree a set of actions that aim to stabilise and reduce the premiums paid by drivers.
As well as setting out the actions government departments and regulators are taking, the report also explores the characteristics of the UK’s motor insurance market. It acknowledges that the market is strongly competitive and innovative and has faced real and increased costs to serve motorists in recent years.
BROADSTONE
Cormac Bradley, Senior Actuarial Director at leading independent consultancy Broadstone, commented:
“There is no magic bullet when it comes to motor insurance premiums. The Taskforce’s final report rightly recognises that a multitude of factors, ranging from external cost pressures to the way claims are managed, drive the cost of cover and all must be tackled if we are to deliver lasting benefits for motorists.
“The industry is not blameless, particularly in the handling of non-fault claims, where the practices of some in passing customers to claims management companies for referral fees can add unnecessary cost to the system. More should be done to ensure incentives align with efficient claims management and fair outcomes for consumers.
“The Taskforce has done a credible job in setting out practical reforms, but some measures will take time to bear fruit. Fundamentally, we also need to get better at designing and building more resilient vehicles, and at developing the skills and capacity to repair them when accidents happen. The insurance industry must be ready to play its part in this collaborative effort.”
Commenting on the Government’s publication of the Motor Insurance Taskforce report, Stuart Hanley, Director of Legal Practice at Minster Law, which handles thousands of road accident injury claims every year, said:
“The report confirms that bodily injury costs have not been a major driver of motor claims inflation, and in our view underscores the importance of not intervening further in this section of the market. Ministers have handed the baton on to the MoJ, which is consulting on the impact of the whiplash reforms, but we are pleased that ministers have not adopted calls to increase the small claims limit or further erode damages for non-whiplash injuries. We also welcome the ruling out of a move to a ’non-fault’ system of motor insurance claim, which would bring significant upheaval in our legal system and require primary legislation.”
Some quotes from the report
*The FCA’s analysis found that the cost of bodily injury claims rose by 7% between 2019 and 2023, indicating that bodily injury has been a less significant driver of the increased premiums observed during the period than other types of claims cost. However, bodily injury claims remain responsible for around a third of total motor insurance claims costs, making bodily injury an important component of premium levels generally.
* The UK does not intend to pursue reform towards a no-fault system. Existing tort law supports individual accountability and a change would represent a fundamental shift in how the UK legal system deals with compensation that results from motor insurance claims. At this time, the government does not consider there to be a compelling case for such an intervention.
ACSO
Commenting on the Government’s publication of the Motor Insurance Taskforce Report, Matthew Maxwell Scott, Executive Director, The Association of Consumer Support Organisations, said: “The ambitions of the taskforce in reducing sky-high insurance costs, especially for certain groups, seem to have come to naught. Instead, all we have is a rehash of previous announcements by the Government, the FCA, and insurers, and nothing substantial to alleviate pressure on consumers, which was the entire point of this initiative.
“The Government’s promises when in opposition were that there would be a full investigation into the motor insurance market by the FCA and the CMA. Given the apparent failure of the taskforce to set out solutions to the problems facing drivers, it is time this idea was dusted off. The taskforce turns out to have been a fudge.”
FAIR4ALL FINANCE
Jake Attfield, head of strategy at Fair4All Finance, said:
“Reforms to motor insurance must ensure that support reaches the people who need it most. Today, around 2.6 million people are effectively priced out of driving because they can’t afford insurance. Improving access to affordable motor insurance could boost the UK economy by an extra £369 million each year. Ensuring that everyone can access fairly priced insurance isn’t just good for drivers – it’s critical for growth and social mobility.
“Beyond what is included in the final report, we hope to see collaboration and innovation to make insurance fairer and more affordable for low-income and financially vulnerable consumers. This needs leadership across industry, regulators and a renewed focus on this issue in Parliament.”
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net
The latest from the FCA plus some comments below; Firms will benefit from reduced costs and greater flexibility, and find it easier to comply with the Senior Managers and Certification Regime (SM&CR), following reforms set out today by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). The […]
Sanctions are now very much headline news; companies have to be sure that they remain in-line with the latest sanctions lists, says AJ Thompson, CCO at Northdoor plc The beginning of 2022 has seen a huge […]
Here’s the latest update from the FCA on the guidance for lenders and authorised credit providers; We said we would keep our support for consumer credit borrowers under review as the coronavirus (Covid-19) pandemic evolved. […]
Be the first to comment