A law firm specialising in personal injury claims has accused insurers of profiteering, saying that they have been increasing the cost of car insurance premiums when there is no need to do so.
Thompsons Solicitors has highlighted that claims costs have fallen in each of the past five years. In 2010, a total of £8.3bn was paid in motor insurance claims, while in 2015 it was 30 per cent less, at £5.8bn.
However, the Association of British Insurers (ABI) has maintained that there is a fraud crisis in the UK, meaning that insurance premiums are rising due to false whiplash claims being made, among other fraudulent claims.
At the start of October, there was a rise to Insurance Premium Tax (IPT), pushing up costs for insurance products. But, Thompsons still believe customers are being made to pay too much money. For an annual comprehensive policy, the average premium is £629, and this represents a year on year increase of more than 8 per cent, despite the significant fall in costs for insurance companies.
Tom Jones, head of policy at Thompsons, said: “The insurers are taking the British public for fools. They haven’t defined fraud, they haven’t provided any independent evidence that it actually exists at the levels they claim, and they aren’t reporting it to their shareholders as a ‘material risk’.
“In our view, fraud is being cynically exaggerated to attack the rights of honest motorists and to justify premium increases.
“It’s high time that the insurance industry stopped their manufactured hysteria about fraud and concentrated on providing greater transparency so consumers can see if the ever-growing premiums are justified.”