By Marcus Leach
The Office of Fair Trading (OFT) has confirmed that they will look into recent reports of rising UK motor insurance premiums.
It is reported that insurance premiums have risen by 40%, and the OFT will look to see if this is the case, and if so, why.
The main area of concern is if there are any consumer or competition issues to address, and the investigation has been welcomed by the Association Of British Insurers.
“This inquiry gives the industry another opportunity to highlight the cost pressures motor insurers are facing, what action is needed to reduce them, and steps the industry is taking to ensure customers get the best deal when buying motor insurance," Otto Thoresen, the Association Of British Insurers' Director General, said.
“Rising claims costs from personal injury claims and excessive legal costs, insurance fraud and uninsured driving, coupled with lower investment returns in recent years, have unfortunately led to rising motor insurance bills for many customers. In fact the motor insurance industry has not been profitable for the last sixteen years.
“Insurers are acutely aware of the impact that higher motor insurance premiums have for their customers. This is why the industry is doing everything possible to reduce costs, for example by campaigning for compensation reform to tackle excessive legal costs and frivolous claims, and setting up the Insurance Fraud Register to further reduce fraud."
The OFT will gather evidence over the next five weeks and publish its findings in December. This will determine whether it looks any further into car insurance premiums.
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