The AA has forecasted that over the next 12 months the cost of car insurance could increase by up to 10%.
Recently the main headlines being pumped out by the insurance industry’s propaganda mill is that the cost of insurance premiums are on their way down and that this was attributable to the implementation of LASPO and the Jackson Reforms,
But the AA are now contradicting that, pointing to a 0.2% rise on the cost of premiums towards the back end of last year and suggesting that a very different trend to the one that the insurers and the Government wanted, maybe manifesting as we move further into 2015.
As it happens, the number of claims being made for personal injury has in fact increased significantly over the past 12 months. This paints a very different picture of the landscape of the profession and is not one that will please either the insurers or the Government.
The AA have themselves admitted that, although they believe the reforms to tackle fraud within the profession have had a positive impact without discouraging genuine claimants, the main reason behind the reduced premiums since the implementation of the reforms was in fact more to do with the pressure on prices within the motor insurance market itself.
Their claims are somewhat supported by the fact that currently there are, on average, 71,000 personal injury claims being submitted across the UK per month. This represents an increase of 5,000 claims per month on the average number of claims being made in the lead up to March 2014.
If what the AA has forecasted does develop and we do see an upturn of 10% over the next 12 months on premium prices, this could spell disaster for the Government over the methodology behind their decision to implement the reforms on the back of the demands of the insurance industry.
It will also raise the question over whether fraud really is the factor to be most concerned about when it comes to escalating premium prices and whether or not the insurance have, as the personal injury profession have insisted all along, been taking everyone for a rather expensive ride.
Scott Rees and Co Marketing Partner, David Byrne, is not surprised with the forecasts being made by the AA and insisted that it is time the Government woke up and began to tackle the real problem at hand.
He said: “Over the past few years it is common knowledge to everyone within the profession that the Government have had the wool pulled over their eyes when it comes to the issue of rising motor insurance premiums.”
“The insurer propaganda mill has been hard at work since the turn of the year and the Government has, once again, fallen for every word that has come out of their mouths.”
“It is no surprise that there were reductions in the immediate aftermath of the reforms and this was alluded to at the time, when the reforms were implemented.”
“No one can deny that the reforms have had some impact on reducing the number of fraudulent claims being made within the profession but compared to the dodgy dealings of the insurance industry themselves, including the encouragement of spurious claims, this was relatively small fry.”
“It has always been clear that the MoJ’s reforms were not the predominant reason for the price decreases since their implementation and now the Government look set to learn the hard way just how bad the insurance industry has been deceiving them”
“The line from the insurers since the turn of the year is that premiums have come down so ‘long live the reforms’ but this is simply a smokescreen for what is to come.”
“My only hope, as is the hope of the personal injury profession as a whole, is that the Government wake up and realise the error of their ways before the insurers can convince them to interfere with the small claims limit.”
“Of course the positive to all this is that people, despite the reforms and the best attempts of the Government and insurers, are still seeking and able to gain access to justice and that as a result personal injury profession is still alive and well.”
It will certainly be an interesting 12 months should the AA’s forecasts come into fruition, especially as the insurance industry are still hoping to target the small claims limit within their agenda for further reform.
Surely we couldn’t have been right over the reasons for increasing insurance premiums all along could we?