The Competition Commission (CC) exposed the bad practices of the insurance industry in their latest report on the rising cost of motor insurance premiums, released before Christmas.
Provisional findings of the CC’s year long investigation into the conduct of the private motor insurance industry has found that due to a ‘complex chain’ for the settlement of non-fault claims, the cost of vehicle hire and repairs has increased and that this is being passed on to the insurers of at-fault motorists.
As a result the insurance industry has over-inflated yearly premium charges to the tune of £150-200 for all insured motorists in order to make up the cost.
Alasdair Smith (pictured), Deputy Chairman of the CC and chair of the private motor insurance investigation group said: “Our provisional view is that many drivers of the UK’s 25 million privately registered cars are footing the bill of unnecessary costs incurred during the claims process following an accident.”
There was also concern for the substandard quality of post-accident repairs and the insurers are accused of not bring as efficient when it comes to monitoring this whilst denying the chance for the motorist to check themselves.
Mr Smith continued: “We have concerns about the quality of post-accident repairs because too many repairs are substandard. We also find that the way add-on insurance products are sold make it hard for customers to find the best-value products.”
All of this comes in stark contrast to the ongoing accusations made by the insurers over the past two years that rising premiums were down solely to ‘ambulance chasing’ personal injury firms.
These accusations, which were supported and trusted by the government went on to bring about huge cuts to the fixed recoverable costs regime and is responsible for many firms struggling to continue offering their service
The CC’s investigation has been ongoing over the past year and now, with these findings coming to light, they vowed to look at ways to bring down the costs of insurance premiums.
For the personal injury sector the news comes as no shock and simply proves what many have been lobbying over the past two years and that is that the insurance industry has never had the best interests for the consumer at heart and that their campaign for change has simply been to guard their profits.
1. GOV; https://www.gov.uk/government/publications/cma-panel-member-biographies-and-disclosures-of-interest/inquiry-chairs-biographies