Tuesday 17 December 2013

U.K. regulator looks to cut motor insurance costs

The U.K.'s Competition Commission said Tuesday it is examining ways to lower insurance premiums for motorists after a report on the 11 billion pound ($17.93 billion) industry showed motorists were shouldering unnecessary costs.

"Our provisional view is that many drivers of the U.K.'s 25 million privately registered cars are footing the bill for unnecessary costs incurred during the claims process following an accident," Alasdair Smith, the commission's deputy chairman and chair of the private motor insurance investigation group, said.

"These costs are initially borne by the insurers of at-fault drivers, but they feed through into increased car insurance premiums for all drivers."

The CC said the complex chain for the settlement of non-fault claims increases the costs of replacement cars and repairs, which in turn is passed on to the insurers of at-fault motorists. This results in higher motor insurance premiums for all drivers, it said.

The anti-trust body also found that too many repairs after accidents weren't completed to the required standard. It added there were problems with the sale of add-on products to consumers and with the contracts between price-comparison websites and insurers.

The CC--an independent public body, which carries out investigations of mergers, markets and the regulated industries--has published notice of possible remedies, outlining measures it could introduce or recommend to improve competition and address the issues it has identified.

Any interested party is invited to respond to the notice of possible remedies by Jan. 17, 2014, and to the provisional findings report by Feb. 7, 2014, it said.

Source: MarketWatch

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