BIBA response to Competition Commission’s Private Motor Insurance market investigation

17th December 2013

Responding to the Competition Commission’s provisional findings on the motor insurance market, the British Insurance Brokers’ Association’s (BIBA) Executive Director, Graeme Trudgill, commented:

“BIBA is committed to working with the Government to achieve the right outcomes for motor insurance customers and we have already had positive results with premium reductions of 11% this year.”

Price Comparison websites

“BIBA welcomes the Competition Commission’s move to act on most-favoured nation (MFN) clauses. The Competition Commission has recognised the point that BIBA made at the hearing on 15 July 2013.

“MFN clauses have an adverse effect on competition as they restrict a broker or insurer from offering the same product at a lower price elsewhere. BIBA believes MFN clauses are anti-competitive.  

“If a customer walks into a broker’s office, we believe they should be able to offer the premium at a cheaper price. Comparison websites typically charge around £40 to £50 per lead and this saving could be passed onto customers if the use of MFNs are restricted.

“BIBA will also be contributing to the Financial Conduct Authority’s (FCA) review of comparison websites announced last month.”


“Customer service has improved dramatically during the last 25 years. The advent of replacement vehicles means that customers can continue to drive to work and take the kids to school, along with the introduction of approved repairers taking away the stress of arranging estimates for repairs.

“However, BIBA believes that claims management costs are too high. We were pleased with the Ministry of Justice’s Claims Management Regulation Unit announcement last week – that they will have tougher regulations for Claims Management Companies and new powers to fine them. 

“We acknowledge the issues raised in point 41 of the Competition Commission’s report regarding the insurer of the at-fault driver having no direct control over the non-fault driver’s costs.  However, we are concerned that if the Competition Commission want the fault insurer to repair the vehicle, then this is outside of the customer’s insurance contract and the fault insurer would have to balance a conflict of interest between their own costs and those of the third party seeking recompense. This needs careful consideration. Insurers should challenge any unreasonable costs made by a claimant or claims management company.”

Add Ons

“The FCA’s work on motor legal expenses insurance demonstrates that the product has utility, we also believe that protected no claims bonus and other add ons are important considerations for customers.

“We share the Competition Commission’s concern in point 63 regarding generic descriptions and limited comparisons about add ons from price comparison websites and would encourage action to improve this area so that customers have a clearer understanding of their options. Insurance is a complex contract and insurance brokers can offer a helpful explanation to customers in this area.”


Quality of repairs 

“Insurance brokers place around a third of private motor insurance products, and acting as agent of the client, would raise any repair quality concerns with insurers. We have not received details of any issues from members and would make the point that approved repairers have guarantees over repair quality and any complaints should be made to rectify any issues.”


Notes to editors

1. To view the Competition Commission’s related papers, please click here

2.For further information please contact:

BIBA press office:
Leighann Forsyth, Head of Communications
020 7397 0223
[email protected]

2.. About the British Insurance Brokers' Association

The British Insurance Brokers' Association (BIBA) is the UK's leading general insurance 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.

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.

Brokers provide professional advice to businesses and individuals, playing a key role in the identification, measurement, management, control and transfer of risk. They negotiate appropriate insurance protection tailored to individual needs.

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.