Groupama: 'Ban referrals now'

Groupama has called for referrals fees to be abolished in the wake of the report from the House of Commons Transport Committee into the cost of motor insurance.

Groupama also called for early implementation of Lord Justice Jackson’s recommendations following his review of spiralling civil litigation costs.

Steve Caffrey, head of technical claims at Groupama said: “It is very clear that referral fees are the principal driver of the huge increase in both the number and cost of personal injury claims over the last few years, which in turn has led to substantial rises in average motor insurance premiums for customers.

"The removal of incentives like referral fees would make a real difference in controlling claims inflation and also help to ensure that premiums are more affordable.”

Groupama also expressed concerns about the validity of some of the claims that the industry is now facing.

He added: “A significant and rising proportion of road traffic injury claims are exaggerated or more obviously fraudulent, resulting from a personal injury claims referral system which provides easy financial reward in return for very little evidence and the minimum of effort. If referral payments to claims farmers were stopped, many fraud enablers would disappear.

"This would be good news for insurers but most importantly it would really benefit the customers who ultimately bear the increased cost in their premiums.”