Government task force: "Motor insurance premiums unlikely to reduce"

Government taskforce admits motor task force suggestions ‘unlikely to bring down premiums’

[Thanks Insurance Post]

Well, that’s disturbing and frustrating. In October, a task force combining the ABI, Citizens Advice, Compare the Market, Which? and the Regulator were tasked by the Department of Transport to tackle the spiralling costs of car insurance. The Motor Insurance Task Force: Final Report & Actions has been published.

Main suggestions:

1. Introduce limits on risk factors used to determine premiums
2. Publish commercial pricing models to increase transparency and fairness for consumers
3. Ban firms from charging more for no-fault accidents
4. Give consumers more freedom to experiment with answers to application questions without being viewed as a fraud risk
5. FCA to do more to encourage the use of telematics technology (Raaay!)

The report clarifies that the task force will not intrude on firms’ commercial pricing decisions, and that many of these suggestions are ‘unlikely to reduce premiums’. In fact, the report warns that their suggestions might increase premiums due to compliance costs being passed on to the consumer.

A separate section on Claims outlines a commitment for the FCA to work with the ABI and Insurers to ‘consider how claims can be better managed to ensure greater efficiency and cost control, without adversely affecting customer outcomes’. However, there is no mention of telematics – we at Redtail feel this is a major oversight considering the positive impact that telematics data can have on claims handling.

It is fair to say that industry reactions have been mixed. You will have read my views on both ‘fairer’ car insurance and telematics informed claims. Other than 5) above not much impetus. The naysayers have lamented the lack of specific actions. It is easy to pick at the negatives, but I prefer to dwell on the positive and doable. Calling FCA folk to discuss with me/us on educating on and actively encouraging the use of telematics within their Smart Data Accelerator. Indulge my broken record: fairer because rich and valuable driver and vehicle data informs risk. We have done the miles. We have done the machine learning. We are ready to help. Claims that are efficient and cost controlled, without adversely affecting customer outcomes, can be driven by telematics. Ptolemus is espousing the term e-FNOL. Digitise the thing. More immediate, robust and helpful (to insurer and policyholder) data. Again, we are ready.

Let’s DO something?!?