Accident management companies are being invited to join a new trade body for the £400m industry that could result in the merger of its two existing associations.

Former ABI deputy director general, Tony Baker, is leading the move, due to be detailed in a prospectus published this month.

Baker, the new body's director general, said it intended to unite the industry, which is split between the British Association for Accident Car Hire (Bafach) and the National Association of Credit Hire Operators (Nacho).

Membership will also be offered to credit hire firms.

A steering committee has been formed with the aim of establishing the body within the next three months.

The committee includes representatives from Auto Indemnity, National Car Rental, the Ellen Group, Accident Assistance, 3 Arrows and Helphire.