With part two of the whiplash reforms coming back into focus, the former CHO chair says the credit hire industry has ‘gone backwards’ and that ‘Covid has exacerbated’ the sector’s problems

The credit hire sector has seen “bad behaviours creep back into the industry” following the onset of the Covid-19 pandemic, according to Kirsty McKno, managing director of credit hire firm Cogent Hire, part of handl Group, and former chair of trade body the Credit Hire Organisation (CHO).

With part one of the whiplash reforms – which includes the implementation of the new Official Injury Claim (OIC) portal and a tariff table for whiplash injuries – scheduled for launch on 31 May, attention is starting to turn to the much-delayed part two of the planned reforms. This was originally earmarked to tackle credit hire and rehabilitation.

To date, the credit hire sector has fallen outside the regulatory scope of the FCA, which only regulates claims management companies that deal in personal injury claims.

The credit hire industry has, therefore, been self-regulating, in part through the General Terms of Agreement (GTA) – this creates standards between insurers and credit hire firms.

Thinking ahead to part two of the whiplash reforms, McKno told Insurance Times: “One of the issues is we haven’t moved on as an industry since part two was first looked at. In fact, we’ve probably gone backwards as an industry.

“The government put forward lots of ideas and solutions which, at the time, everybody said ‘no, that can’t happen, we’re already in a place where we control ourselves’, which wasn’t quite true even then.

“But since then, we’ve gone backwards and Covid has exacerbated that problem. We’ve started to see problems of old and bad behaviours creep back into the industry.

“My worry would be that when part two comes out, if the industry is asked the question: ‘what have you done to move yourselves forward?’, there would be very little that they could answer with in a positive way.”

Providing the antidote

McKno has ambitions to take a different approach to credit hire, however, seeking to eliminate these potential points of “bad behaviour”.

Last week, she announced the planned launch of her new credit hire firm, Cogent Hire. She told Insurance Times that the business will have a keen focus on fraud and transparency, as well as using technology to create efficient and cost-effective processes.

“I hope that Cogent is part of the antidote in that we can say ‘we have moved on’ because we’ve had grown up conversations with insurers to find a solution to the problems in the industry and here we are, actually proving that it can be done,” she explained.