The ABI and the Association of Personal Injury Lawyers (Apil) are at loggerheads over proposals to remove lawyers from the compensation process.
The two bodies met last week to discuss the ABI's proposals to replace lawyers working on claims under £25,000 with a free telephone helpline to assist claimants.
Rather than adopting a full reform of the process, Apil chief executive Denise Kitchener said she would prefer "improvements to the current system."
She said: "We don't believe in removing lawyers from the low end claims. The evidence shows insurers will under-settle claims if a lawyer is not involved."
Kitchener slammed the plans saying: "No matter how these proposals are presented it would be naive to think that they are anything but an attempt to cut costs and increase the insurance industry's profits."
Justin Jacobs, ABI's head of liability, motor and risk pricing, hit back.
"No matter how Apil wishes to present its concern it is defending a system which creates £2bn per annum for claimant lawyers," he said.
AXA claims director David Williams, who sits on the ABI's liability committee, said the ABI would have to compromise initially, but would triumph in its efforts.
"What the ABI is proposing we will get at some point, but it will be phased in," he said.