Context
The ABI has responded to the FCA’s general insurance sector announcements, addressing in particular the issues of motor claims costs and premium finance.
Key points to note and next actions
The ABI Director General, Hannah Gurga, said that the FCA’s findings confirm that record-breaking claims costs are behind recent increases in motor insurance premiums, and that many of these cost pressures (e.g., rising vehicle repair costs, part shortages and increa sed thefts) stem from issues beyond the industry’s direct control, making collaboration essential to find sustainable, long-term solutions
- Gurga believes that ABI members work hard to achieve a smooth and stress-free claims process, but that the ABI will engage with them and the regulator to understand what improvements can be made in the claims handling journey.
- On premium finance, Gurga acknowledged that the option to pay for insurance in monthly instalments can provide flexibility for those who need to manage their budgets, but that offering this service does involve costs for insurers, and firms also have to keep cover in place for a period of time if a payment is delayed or missed.
- The ABI’s Premium Finance Principles, published last year, outline that any charges should be fair, transparent and reflective of the costs that the insurer faces