LMA gives evidence to MPs on cost of motor insurance

The Lloyd's Market Association (LMA) had told MPs that motor insurance price cuts can only be achieved by reducing insurers' risks and costs.

LMA underwriting manager David Powell appeared as a witness before yesterday's Transport Select Committee responsible for investigating the cost of personal motor insurance in England and Wales.

The government also announced this week that insurers should be allowed to access drivers records to help reduce fraud, as reported in this week's issue of Insurance Times.

Powell said motor insurers wanted quick implementation of the Lord Jackson and Lord Young reviews, and added: “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.

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.

A final report by the Transport Select Committee on the cost of motor insurance will be published later this year.