Following the Queen's Speech, Mohammad Khan, general insurance leader at PwC, comments on the motor insurance market:"Today's news on Whiplash claims is good news for motorists. This will ensure that genuine claimants get paid fairly but exaggerated claims will be reduced. This could save motorists an average of £35 - £40 per motor insurance policy. The savings from this measure will help mitigate some of the recent increases due to the Ogden discount rate change.
"Insurers were expecting some further details on the Ogden discount rate consultation, and although there was no explicit mention of it today, it may be included within the Civil Liability bill. We should find this out within the next two weeks.
"An update on the Ogden rate is important for motorists as the average motor insurance premium has already increased by between £25 and £50, and by about £100-£200 for younger drivers.
"Many insurers have not yet factored the Ogden discount rate change into the price of their premiums as they had assumed that the Government consultation would change the methodology to mitigate the full impact.
"The worry for motorists would be if the Government decides not to revisit the Ogden discount rate methodology in this Parliament, meaning premiums will have to continue to rise next year. If we applied the current methodology for estimating the Ogden discount rate , the rate would move to -1.75% next year. This would further increase motor insurance premiums by approximately £50 - £100 and by approximately £200 - £500 for younger drivers."
In response to today’s Queen’s Speech regarding legislation to help reduce motor insurance premiums, Mike Brockman, CEO of telematics insurance pioneer, Insure The Box said: “Whiplash reforms are welcome but long overdue. Young drivers in particular have seen disproportionate increases to their premiums due to a range of factors – not least the dramatic change to the Ogden rate – but this is at least a glimmer of hope for the vast majority of honest motorists who are subsiding the dishonesty of a small minority of others. Any changes that lower costs and increase access to insurance for young people must be welcomed – the ability to drive opens up many opportunities, not least employment and education for those in more rural areas.
“We have always taken a hard line on fraud at Insure The Box to protect our law-abiding customers, using telematics data to support claims investigations where we suspect accidents have been staged and claims exaggerated. Insurance Fraud is far from a victimless crime and we see the real damage that can be done by these incidents.”
“We welcome the Government’s appetite for change and would like to see detailed consultation on the nature of fraud and exaggerated claims in the motor insurance industry.”
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