Major insurance firms have committed to returning 100% of savings made from new government whiplash reforms to motorists. The agreement was made at a recent roundtable discussion between the insurers and government. The details of the plans will go to consultation early this year.
Chancellor George Osborne announced in his Autumn Statement that the government would halt compensation for minor whiplash and soft tissue injuries and raise the upper limit for the small claims court for personal injury claims from £1,000 to £5,000.
Mark Wilson, chief executive officer of Aviva plc, says: “Aviva will pass on 100% of the savings from this government initiative to our customers, reducing customers’ average premiums by around £40-£50 when it is implemented.”
John O’Roarke, managing director of LV= General Insurance, which entered the legal services market this week, says: “We’re fully supportive of the government’s moves to crack down on the fraud and claims culture in motor insurance and will pass on all savings to customers.”
However, Apil president Jonathan Wheeler says the insurers’ promise is “very difficult” to believe. “The same promise was made to the government by the insurance industry before the extension of the portal, overhaul of medical reporting, introduction of data sharing, and cuts to solicitors’ fees, yet here we are again hearing the same excuses for high premiums,” he says.
Wheeler contends that while government figures show that whiplash claims have fallen by more than a third in the past four years, insurance premiums have continued to increase.
