The cost of motor insurance was under the spotlight in a BBC One Panorama programme titled ‘The Great Car Insurance Swindle' which aired last night (12/07).
The programme used examples of a number of issues that are impacting on premium costs including fraud, increased volumes of personal injury claims and referral fees.
Reviewing the programme, Tom Moss, Director -Technical, Allianz Retail, said:
Last night's Panorama programme provided a fair and balanced overview of some of the key issues that are contributing to the rising costs of motor insurance in the UK. As it rightly pointed out, the personal motor market has not made a profit for several years as the increase in fraudulent activity, rising frequency and cost of personal injury claims and a surge in credit hire fees, have outstripped premium incomes. This is clearly unsustainable and has meant that many insurers have had to take corrective action with their pricing which has led to the dramatic increases in premiums that some consumers are currently witnessing. The programme successfully highlighted the current issue around referral fees which we believe will only be effectively eradicated if there is a market-wide solution via regulation or some other mandatory instrument. This regulation needs to be drawn broadly enough to prevent current payers of referral fees adjusting their business models to achieve the same effect as today via a different mechanism.
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