BIBA response to CMA remedies for private motor insurance market
24th September 2014
The British Insurance Brokers’ Association (BIBA) has responded to the Competition and Markets Authority’s (CMA) remedies from their private motor insurance study announced today.
Steve White, BIBA’s Chief Executive, said: “We are pleased that the CMA listened to our concerns and are outlawing anti-competitive ‘wide’ most favoured nation (MFN) parity clauses as these are detrimental to customers.”
“However, this is not enough, if they wanted to do the right thing for customers then they should have gone further and ban what they call the ‘narrow’ clauses too which in our view are also anti-competitive”.
Graeme Trudgill, BIBA’s Executive Director, said: “The CMA has made a sensible decision in not proceeding with some potential remedies regarding making the innocent driver’s insurer pay for their own temporary replacement vehicle.
“We also agree with their decision not to require the fault driver’s insurer to manage the innocent driver’s repairs – which was a major conflict of interest.
“We agree the system of no claims bonus (NCB) protection should be explained clearly and will raise awareness of the CMA new wording with our members.
“The Financial Conduct Authority (FCA) is already looking at the sale of add-ons and the points given in its motor legal expenses report last year have been adopted by the market.”
BIBA has been working with not only the CMA but also the Department for Transport, Ministry of Justice, DVLA, Transport Select Committee, FCA, Office of Fair Trading, 10 Downing Street and the Treasury during the last few years to bring down the cost of motor insurance.
The numerous actions taken by the industry and government have reduced the cost of uninsured driving and aim to drastically reduce the cost of fraudulent whiplash claims. Motor premiums have been reducing as shown by the BIBA-Acturis Insurance Price Index which shows a 5.6% discount in the cost of motor insurance for quarter two 2014 compared to the same period last year.
However there is still work to do, particularly for young drivers. BIBA will continue to work with the relevant Government departments to ensure customers have access to affordable motor insurance from its Find a Broker Service and its members will continue to develop new products to help motorists.
Notes to editors
1. For further information please contact:
BIBA press office:
020 7397 0231
2. About British Insurance Brokers' Association
The British Insurance Brokers' Association (BIBA) is the UK's leading general insurance intermediary organisation representing the interests of insurance brokers, intermediaries and their customers.
BIBA membership includes just under 2,000 regulated firms having merged with the Institute of Insurance Brokers (IIB) in November 2011.
General insurance brokers contribute 1% of GDP to the UK economy and BIBA brokers employ more than 100,000 staff.
53% of all general insurance is sold by an insurance broker and they arrange 81% of all commercial insurance business.
Insurance brokers put the client’s interests first, providing advice, access to suitable insurance protection and risk management.
BIBA helps more than 400,000 people a year to access insurance protection through it’s Find a Broker service, both online and via the telephone.
BIBA is the voice of the industry advising members, the regulators, consumer bodies and other stakeholders on key insurance issues. BIBA provides unique schemes and facilities, technical advice, guidance on regulation and business support and is helping to raise, and maintain, industry standards.