The Office of Fair Trading (OFT) has announced it is launching a market study into private car insurance in the UK.
According to the organisation, the investigation will focus its attention on third party vehicle repairs and credit hire replacement vehicles to claimants.
Recent research carried out by the body suggested private motor insurance premiums paid in the UK between 2009 and 2010 increased by around 12 per cent, followed by another nine per cent jump during the first three quarters of 2011.
It discovered there has been a rise in costs associated with personal injury claims as well as third party non-injury instances – suggesting there are elements of the market in the UK that serve to distort and restrict competition.
Sonya Branch, senior director of services, infrastructure and public markets at the OFT – which is a non-ministerial government department set up by statute in 1973 – said: “Our concerns relate to the provision of third party vehicle repairs and credit hire replacement vehicles to claimants, where we suspect companies may be competing to extract money from each other.”