A reduction in the price of motor insurance can only be achieved if the risks and costs borne by insurers are reduced, the Lloyd’s Market Association (LMA) told MPs yesterday.
David Powell, the LMA’s underwriting manager, appeared as a witness before the Transport Select Committee investigating the cost of personal motor insurance in England and Wales.
During his evidence to the committee, Mr Powell made four specific recommendations for Government action. He said: “Most importantly, we need to reduce the costs associated with personal injury claims. With this in mind, motor insurers advocate the rapid implementation of Lord Jackson and Lord Young’s recommendations, which include a clamp-down on referral fees and aggressive claims marketing.”
Other LMA recommendations made to the committee of MPs were:
– To bring in continuous insurance enforcement, quickly and fully funded
– To seriously consider how to reduce the risks presented by inexperienced drivers, including restricted licences
– To improve data sharing between government agencies and the insurance industry, and step up enforcement activity against low-level fraudsters
Commenting on the committee session, Mr Powell said: “My impression was that the MPs felt that some of the problems of the current system can be placed squarely at the door of the insurance industry. They accepted that claims numbers have gone up a lot, and that there is a compensation culture.”
The Transport Select Committee is investigating the rising cost of private motor insurance. The committee wants to understand the reasons behind the rate increases and assess their impact on young drivers in particular. MPs are also considering whether the cost of motor insurance has any impact on public policy.
Other witnesses giving evident alongside Mr Powell were former Association of British Insurers director general Mark Boleat, Chief Superintendent Geraint Anwyl and the Secure Vehicle Alliance.
A final report by the Transport Select Committee on the cost of motor insurance will be published later this year.
Source : LMA Press Release
