It came as discussions between the credit hire industry and insurers on the scope of a revised GTA reach an important stage
A refreshed General Terms Agreement (GTA) needs to take account of “seismic” changes in the motor claims market.
That was according to Anthony Hughes, chair of the Credit Hire Organisation (CHO), who said in a statement yesterday (5 June 2023) that the Covid-19 pandemic and conflict in Ukraine “contributed to unprecedented increases in the cost of motor claims during the last two years”.
The GTA is a voluntary protocol which removes friction in settling credit hire claims.
Hughes said it was a “unique and valuable tool to ensure the smooth running of the credit hire claims market”.
“We maintain that it represents the best means of controlling the sector without recourse to regulation,” he added.
“But, we have long argued that it needs to flex and adapt to better reflect market volatility – and finding a solution, or GTA2 if you like – has been top of our agenda for the last few months.”
‘Measured and helpful’
This came as a statement released yesterday said that discussions between the credit hire industry and insurers on the scope of a revised GTA reached an important stage.
Read: Motor insurers and credit hire companies agree increased hire rates
Read: Former CHO chair launches credit hire company to turn sector ‘on its head’
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In October 2022, motor insurers and credit hire companies signed an interim agreement on increasing certain hire rates to reduce the impacts of “bottlenecks in the supply chain” that “weren’t reflected”.
The agreement – which is for subscribers to the GTA – will apply until 30 June 2023 at the latest.
Last year, the CHO said it hoped that a more comprehensive set of rates would be finalised by this time following the completion of rates research by external consultants.
Yesterday, Hughes said his members received a “measured and helpful” response from motor insurers to a position paper on the way forward, prepared by the CHO’s specialist GTA working group.
“At its core, the major operational issues focus on hire rates and vehicles groupings,” he added.
“The insurers have proposed a new methodology and framework to capture vehicle groups and acknowledge that both sides are closer to reaching an agreement on rates.”
He explained that there was still work to be done on governance, including the nature, scope and remit of an independent GTA chairperson, the removal of ambiguities in the GTA and data management.
Hughes added: “We very much welcome the response from our insurer partners on the GTA’s review and believe there is commitment from all sides to conclude the discussions with a revised GTA that is fit for purpose for the 2020s.
“We are seeking to arrange a meeting of the relevant parties at the end of June and will hope to update our members and interested parties in July.”
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