Ageas welcomes OFT decision but wants fixed legal costs, fraud and whiplash as part of reform package

Barry Smith, Ageas

Ageas today welcomed the Office of Fair Trading’s provisional decision to refer its probe to the Competition Commission.

However, Ageas wants the referral to be part of a wider reform package.

A spokesman said: “Ageas adopts a high service, low cost approach to claims management in the best interests of our customers and as such we support today’s OFT decision.

“The referral will ensure the Competition Commission can conduct an independent review into how credit hire and repair costs are better managed on behalf of consumers, without creating competition concerns around the sharing of information within the industry.

“This referral needs to be seen as part of a wider package of measures that need to be tackled, called for by Ageas and others in the industry, including whiplash claims, fixed legal costs and fraud which ultimately create higher premiums for consumers.”

Groupama claims director Darren Willls said: “The UK’s private motor insurance market remains one of the most competitive in the world and Groupama Insurances has been at the forefront of calls for an outright ban on referral fees to help improve profitability and therefore reduce costs for motorists.

“We welcome the additional scrutiny that a referral to the Competition Commission can bring in reviewing the differing repair models being applied across the market. At Groupama, there is no difference in our costs for ‘fault’ and ‘not at fault’ repairs, our model is transparent and we challenge others in the market to be able to say the same.

“It’s time to refocus the industry’s expertise on building a service framework that genuinely puts the customer at the centre of our actions.”

A Direct Line Group spokesman said: “Direct Line Group welcomes the Office of Fair Trading’s decision, to refer the replacement vehicle and repair aspects of the motor insurance market to the Competition Commission.

“We agree with its view, that elements of the market are currently dysfunctional. Over the past months we have co-operated fully with the OFT and continue to review the conclusions and recommendations in its report.”

Transport Select Committee chairwoman Louise Ellman agreed the decision should be part of a bigger reform package.

She said: “The OFT’s provisional decision to refer the highly dysfunctional UK market in private motor insurance and related goods or services to the Competition Commission for full investigation is a major step forward.

“Like the OFT, we found evidence to support the view that various features of the private motor insurance market prevent, restrict or distort adequate competition in ways that do not deliver a fair deal to motorists.

“I will propose to the Transport Committee that we participate in the consultation announced today to make the strongest possible case for the referral. I now expect car insurers and the other firms involved to co-operate fully with all stages of this process.”