The ABI's driving force

The ABI motor committee is not the most renowned organisation within the industry. But it crucially sets the strategic direction for the ABI's work on motor insurance, setting priorities and forming ABI policy.

Its chairman is the unassuming Fortis chief executive Barry Smith, who has held the post since 2003 and is looking to see through a third year, given what he views as his successes of the past 12 months.

"There has been much progress over the past 12 months: the uninsured side has been key, making sure the Greenaway report (the recommendations for reducing the level of uninsured driving in the UK) has not just sat on government shelves.

"As well as the initial preparation on telematics (calculating premiums based on when and how far a vehicle is driven), the campaign to improve road safety and the record of young drivers," says Smith.

The committee's role on uninsured driving has been helped by new laws introduced at the beginning of July that give police extra powers to remove illegal and often dangerous vehicles from the roads.

The Serious Organised Crime Act (2005) gives the police the authority to confiscate the vehicles of uninsured motorists following roadside checks.

"The drive to reduce the menace of uninsured driving is accelerating," says Justin Jacobs, the ABI's head of motor insurance.

And ABI director general Stephen Haddrill shares this excitement: "Reducing accidents involving young drivers should be the number one road safety priority for Britain.

"Research carried out by the insurance industry shows that teenage drivers are 10 times more likely to be killed or seriously injured while driving than motorists in their 40s."

The jewel in the crown of Smith's committee work has been how the ABI's motor insurance fraud database has evolved. It recently caught its first insurance cheat. The database detected that the policyholder who claimed that his car had been stolen and recovered stripped, had made the same claim six years ago.

The national database to combat fraud contains details of all vehicles written off following an accident or reported stolen.

"It identifies fraudsters, for example by detecting those who insure their vehicle with several insurers at the same time and then try to claim from each following an accident, or having reported the vehicle as stolen," says Smith.

And, he says, work with the government has been constructive. "Work with the government to support data accuracy available to the Motor Insurance Database has been constructive. Key to insurers will be the up-to-date information on the database, because that will help police target those that are uninsured.

"The ABI is increasing its awareness demonstrated by the good progress with the Department for Transport (DFT) on Greenaway as well as the Home Office, and making sure there is good input from a range of different insurers to get people's thoughts."

And this is part of an ongoing push which goes into overdrive later this year. "I am absolutely sure the movement is there, a planned meeting with the DFT in September will continue this. The meeting is to primarily look at the whole Greenaway recommendations and make sure all the stakeholders including the ABI, insurers and Home Office, are delivering what has been outlined in the plan of attack to move forward."

Then it will be action time. "We need to take action. Insurers need up-to-date information on the database. When you look at the government's positive approach to our work we are definitely getting there."

The motor committee meets five times a year and is made up of 12 diverse insurers from the likes of RBSI and Norwich Union to more specialist companies like Sabre.

"We identify opportunities and risks in the wider political environment. And as chair I steer this process and take part in key lobbying meetings and events.

"It is a useful forum for ABI priorities and instructive in the way different insurance firms have different needs. It makes us think hard about what we need to create," says Smith.

Smith considers the achievements of the group as a true team effort.

"It is rewarding putting a team together and as a team we have been collectively very successful on initiatives. The team have been very focused on policy."

Smith admits that on a personal level being chair of the motor committee has been a real learning curve. "From my perspective it was learning about the market issues from a range of stakeholders, including insurers, the government and the ABI on how we can shake up the motor insurance industry."

It has also been beneficial to his business. "Any in-depth discussion helps your business because you become more aware of the market and what action needs to be taken."

For 2006 the priorities will be based on 2005 themes. "We will look at Greenaway, naturally, continue with the uninsured side, regulation is key, as is risk-based pricing and road safety, focus on the issue of telematics, the whole motor claims environment, fraud and crime - it is a wide and diverse agenda.

"What is encouraging is the regular input by insurers to the committee which is critical to getting the issues right."

On the market as a whole Smith knows better than anyone it is a challenging time. "The market is flat, there is an element of selective reduction going on. Some companies are getting a return on capital, but some are not. With claims inflation there has been an erosion of yield."

But it is more of the same for Smith. "The ABI needs to keep aligning itself to the most important issues and insurers should help play a role informing and lobbying to make sure that happens," he says.

WHAT DOES THE ABI MOTOR COMMITTEE DO?

- Ensures that Professor John Greenaway's recommendations for reducing the level of uninsured driving in the UK are taken forward rapidly in a way that reflects business practicalities and industry concerns

- Launches and delivers industry initiatives to understand and improve the motor claims environment

- Launches and delivers industry initiatives to secure an efficient regulatory environment for motor insurance

- Ensures that the industry is able to price risks fairly and freely

- Ensures that the industry contributes positively and effectively to the campaign to improve road safety

- Ensures that the industry contributes positively and effectively to the campaign to tackle fraud and crime.