CMA car insurance recommendations ‘do not address issues’ – RMI Bodyshops
The final requirements of the Competition and Market Authority’s (CMA) Private Motor Insurance Order were brought into effect on 1 August. It is claimed that the requirements, which apply to all providers of private motor insurance, have been put into place to reduce premiums for drivers. However, RMI Bodyshops (NAB & VBRA) feel that the requirements are not, in themselves sufficient to reduce premiums.
Commenting on this, RMI Bodyshops executive director Jason Moseley states, “We have several concerns regarding the CMA’s Private Motor Insurance Order. We believe that the focus has been transactional and lacks transparency.
“There is still the potential for those inclined, to develop ‘work arounds’, a concern that we expressed both during and after the CMA’s investigation.
“The CMA has not addressed all the issues, to our satisfaction, and RMI Bodyshops will be continuing to push for the appointment of an independent adjudicator to oversee the moral and ethical behaviours of insurers, to ensure that the motoring public and our members are treated fairly.”
It is not the first time that the UK’s leading trade association for vehicle repairs has addressed issues in something proposed by the CMA. In 2014, the CMA conducted a Private Motor Insurance Market Investigation. In response to this, the National Association of Bodyshops (NAB) highlighted the ways in which insurers may have gained advantages over their competitors, arguing that behaviours seen within the insurance sector had the potential to increase the price of private premiums.
As predicted by NAB, since 2014, private insurance premiums have increased year on year, with a 19 per cent increase in premium prices in the second quarter of 2016 compared with the same period in 2015; the biggest increase in half a decade.
RMI Bodyshops are now questioning whether this trend will be reversed by this order and is keen to point out that they predicted that, following the CMA’s investigation benign recommendation, private motor insurance premiums would rise, thus denying consumers fair prices for the social utility that is motor insurance.