Insurers “have reneged” on motor insurance premium promises

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The insurance industry has reneged on its promises after failing to reduce motor insurance premiums despite seeing a large drop in whiplash claims in the aftermath of the Jackson reforms, according to Louise Ellman, chair of the Transport Select Committee.

Speaking to The Times, Ellman said that insurers had promised to reduce premiums if whiplash claims fell. The newspaper has highlighted that premiums have risen by an average of £115 per policyholder over the last twelve months, despite whiplash claims falling to £3.6 billion last year, saving the industry some £520 million.

“Fraud must be wiped out but the insurance industry must also honour its promises,” said Ellman in The Times.

“The bottom line is that the insurance industry promised that they would reduce premiums and, if they haven’t done it, they’ve reneged on their promise.”

The Times also quoted Brett Dixon, vice president of the Association of Personal Injury Lawyers (APIL), who said: “Injured people are being made the scapegoats for an insurance industry which is so dysfunctional that it cannot keep premiums under control and which is hitting motorists in the pocket year in, year out.”

However, the Association of British Insurers’ (ABI) general insurance manager, Rob Cummings, said that savings of about £1.1 billion had already been passed on to policyholders in anticipation of the Jackson reforms but that they had been “overpriced”.

The ABI explained that the rises had occurred as insurers tried to recoup losses from a dip in premiums between 2011 and 2014, where prices fell by a quarter.

“The market is trying rectify itself,” said Cummings.

 

 

 

 

 

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Marek Handzel

Marek Handzel is the editor of Claims Magazine. Marek welcomes articles, letters, or feedback from readers and can be reached by emailing marek.handzel@barkerbrooks.co.uk