ABI WELCOMES OFT MOTOR REFERRAL TO COMPETITION COMMISSION

The Association of British Insurers (ABI) has welcomed Friday's announcement by the Office of Fair Trading (OFT) that it will refer the UK motor insurance market to the Competition Commission. The ABI said that reforms of the market would ultimately lead to lower premiums for customers. Following Friday's announcement, ABI director of general insurance Nick Starling said that "the OFT found what insurers have known for years – when a customer has a crash that is their fault, the insurer has little control over the cost of the subsequent claim. In particular, for too long insurers have faced inflated rates for credit hire cars and excessive hire periods, which have led to higher insurance premiums for customers". Mr Starling added that "regulation of all players in the market to tackle excessive costs is needed and we look forward to working with the Competition Commission to bring much-needed reforms to the market, which in turn will result in lower car insurance premiums for consumers".