Here are some thoughts on the Task Force and its long term impact, from Angelica Solutions;
Angelica Solutions welcomes the Government’s Motor Insurance Taskforce final report, whilst urging caution to look more closely at the impact of its recommendations on consumers and the wider insurance market.
Sarah Vaughan, Director of Angelica Solutions, said:
“This is a positive step forward but there’s still work to do. Regulation, claims processes and road safety all need to be approached in a way that reflects the commercial realities of our market. Without that, there’s a risk we simply move costs around rather than remove them.
“While the report sets out several ambitions around fair value and improved oversight, it’s important not to overlook the knock-on effects of previous well-meaning regulation, including (GIPP) General Insurance Pricing Practices rules. Designed to protect consumers from price walking, the rules have led to a rise in stripped back products and reduced consumer confidence in choosing the right cover with no clear benefit in lower renewal premiums.
“In principle, GIPP was about fairness. But in practice, it removed a core profit stream for insurers and created pressure to claw that back elsewhere. One of the clearest results has been the emergence of policies that look cheaper upfront but offer less protection in the moments that matter. We need a proper and timely review of the longer-term effects of these changes.
“The report also confirms its commitment to reviewing claims processes, but it must go further in tackling long standing inefficiencies. In particular, the widespread practice of insurers charging other insurers significantly more to repair vehicles in non-fault claims than they would pay themselves for the same work.
“This is a quiet but significant source of income for many insurers and it has been broadly accepted as commercially legitimate following the Coles v Hetherington case. But customers are footing the bill. If we’re going to intervene in this area, we need to think about where that revenue will be replaced, because insurers will look to recover it elsewhere unless there is a wider shift in how the market operates.
“The link between road safety and insurance pricing is clear, yet this report only touches on it lightly. Telematics should be a core part of the strategy for improving safety and reducing premiums. We need policies that make it cheaper for people to choose usage-based cover, particularly younger drivers who stand to benefit most.
“There is a huge, missed opportunity for the Government to take meaningful steps towards unlocking the vast amounts of safety and collision data currently held by insurers, which remains inaccessible due to commercial reluctance, legal and technical constraints.
“We have the data to understand where and why serious collisions happen but sharing that information is almost impossible. GDPR, commercial sensitivities and legal bills to try to put data sharing agreements in place make it unworkable for any one insurer to lead on this. What we need is a government-backed solution that enables data to be shared safely and for public good”
“We have the data to understand where and why serious collisions happen but sharing that information is almost impossible. GDPR, commercial sensitivities and legal fees make it unworkable for any one insurer to lead on this. What we need is a government-backed solution that enables data to be shared safely and for public good.
“This report sets a direction, but now we need to work through the detail. The next phase must include more engagement with the industry and more focus on the practical realities of delivering change – the longer it takes to review those impacts, the longer customers continue to bear these growing costs. The public deserves a market that is transparent, efficient and fair but we won’t get there without tackling the complexity head on and avoiding years of delay between reviews, recommendations and real action.”
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