It’s more bad news - and the last thing motor insurers need.
… But our report on the spiralling number of periodic payment orders awarded to accident victims shows that the industry’s pain is far from over.
As EMB’s Karl Murphy says, the PPO model reflects the set-up of a life insurer. General insurers are simply not built for this kind of ongoing payout, and the judiciary is seemingly unaware of the unintended consequences of its actions. As ever, increased claims costs mean increased premiums, and the already stretched motor policyholder will end up paying.
If there is to be a change in the nature of compensation payments, it should be properly planned in consultation with the industry and structured and executed accordingly. It should not be the result of a series of apparently random decisions by individual judges. The transport select committee should take up this issue as part of its inquiry into the rising cost of motor claims.
♦ As David Blackman’s party conference special shows, the government’s record on insurance has been mixed. There’s been welcome progress on the Jackson reforms and referral fees - with a little help from a certain Blackburn MP - but a long way still to go on other key areas.
Top among these is flooding. With a lack of major flooding incidents in recent months, and a deluge of other issues, it’s been knocked off the top of the agenda. The Statement of Principles expires in 2013, and an agreement on flooding must be in place by then. Lobbying is going on behind the scenes, but this conversation is too important to be kept to the corridors of power.
It’s time for the industry to set out its demands, and the government to respond. Because one thing’s for sure: the rains will come again.