Daily briefing: Tuesday - Priced off the road

The reopening of the Transport Select Committee’s inquiry into the cost of motor insurance today couldn’t have come too soon. That’s the general feeling in the insurance industry, which wants to see action taken on spiralling motor premiums and referral fees.

But there was more concern raised today when a survey of young drivers by the Transport Select Committee and young driver insurance scheme Young Marmalade revealed some startling results. The headline result revealed that 96% of young drivers feel that they are being priced off the road by high motor premiums. But more concerning to the industry will be that 21% said they have considered driving without insurance, and 30% of respondents have considered providing false information, including 15% who said they would change the name of the main driver.

Uninsured driving costs the industry more than £500m a year and ‘fronting’ is a fraudulent activity that the industry is desperate to stamp out. But how much will the committee take these findings into account in its review? Because it is not young drivers that are the cause of high premiums. Young drivers are linked to the much greater risk of being involved in serious accident that could then lead to a larger than normal personal injury payout.

What’s the pattern here? Referral fees. Most young drivers are unaware that insurers receive referral fees and the Transport Select Committee has not yet backed the industry’s calls to ban referral fees. It seems simple, doesn’t it?

Gerry snapped up by GB

James Gerry returned to the market today in a not too unfamiliar capacity. After a rather hasty exit from JLT’s managing general agency Thistle Underwriting back in May, Gerry has landed the chairman’s role at another underwriting business.

He has emerged at GB Underwriting, an Essex-based commercial underwriting outfit specialising in sole traders, SMEs and affinity groups. The eight-year-old company has kept a relatively low profile in the market but with Gerry on board it has reason for optimism; he will no doubt have a point to prove.

Gerry led Thistle since its inception in 2008, when his appointment coincided with the launch of JLT’s new underwriting division. Thistle had plans to attack the SME market where consistently soft commercial rates put pressure on the business. His exit in May came after an internal review uncovered “duplication of some important aspects of the roles of the senior management”. Thistle chairman Adrian Gerling stepped in, and Gerry was no more.

GB will now call on Gerry’s experience to target growth in a difficult marketplace. It has pulled off a major coup by landing his services, which by his own admission, were very much in demand.