Motor Insurance Taskforce’s decisions likely to be ‘unpopular’ with drivers

The UK government’s Motor Insurance Taskforce is set to announce sweeping new proposals that will not only change the way motorists insure their vehicles, but also how they drive.

That was according to Mark Bailie, chief executive at insurance comparison giant Compare the Market, who claimed that the results of the taskforce’s efforts are likely to be unpopular with drivers as to reduce insurance cost, it will mean claims will need to fall significantly.

The taskforce was set up by the government in October 2024 in response to rising motor insurance prices and warnings that premiums were pushing cover out of the reach of an increasing number of motorists.

Speaking during a panel debate at the 25^th Insurance Innovators Summit in London, Bailie asked if there was anything he could say on the progress of the Motor Insurance Taskforce, of which he is a member.

In response, Bailie said: “We have undertaken some fairly detailed analysis.

“We wanted to know how many vehicles crash, why they crash, the kinetic force of those crashes and the claims implications.”

The results have moved the debate on to the underlying steps needed to significantly reduce claims and with it premiums.

Bailie hinted proposals on the table include a move to a national 20mph speed limit in urban areas, a rise in low vehicle zones and a fundamental review of the costs of spare parts.

“It is not popular and we understand that these proposals will require decisions which go across two government departments.

“What is encouraging is that the government understand that there will need to be cross departmental action and we are looking at the delivery of proper solutions and reforms.”

Reduction in rates

At present, it is estimated that over one million UK drivers do not have insurance, with concerns that with the cost of living crisis continuing, the choice between heating the home, feeding the family and the purchase home or motor cover would be an easy one in the minds of many.

However, Bailie said the motor sector was seeing a reduction in rates.

“On the whole we saw premium rates peak 15 months ago and at present we see a 10%-15% reduction,” he explained.

“The speed of the rises and the reductions go to reflect how competitive the market is.

“We are comfortable that this was a supply side shock and as such the last thing we need is an undercapitalised financial services sector.

“At the height of the pricing the difference between the cheapest premium and the fifth cheapest premium for the same motor risk was £280. It was simply a reflection that no two insurers could insure the risk at the same price.

“Clients look at motor insurance as a supermarket, where they simply have the choice between different brands and at difference prices. In reality it is a fluid market where the risks are traded and they are priced live. For us, the ability to deliver pricing transparency is vital.”