Law firm Thompson Solicitors has lambasted insurers for “manufacturing hysteria” over car insurance fraud and for allegedly profiteering from honest drivers.
According to Thompson, figures from the Association of British Insurers (ABI) showed that costs of car insurance claims declined from £8.3 billion in 2010 to £5.8 billion in 2015.
However, the ABI “sat” on this figures because they compromised its lobbying efforts for further reform of personal injury, the law firm alleged, as reported by the Law Society Gazette.
“This latest information that has been sat on by the ABI completes a picture they would rather not have out there - of a booming industry with healthy profits and cash reserves paying out huge dividends,” Tom Jones, head of policy at the law firm, was quoted as saying in a report by the Daily Mail.
Jones said car insurance fraud should be tackled but he claimed that the issue is being “cynically manipulated.”
“Fraud is being repeatedly used as a battering ram for reform that would actually mean only more profit for insurers,” the Daily Mail
quoted him as saying.
“The insurers are taking the British public for fools – they haven’t defined fraud, they haven’t provided any independent evidence that it actually exists at the levels they claim and they aren’t reporting it to their shareholders as a ‘material risk’.”
For the law firm, Jones said fraud is being “cynically exaggerated” to attack the rights of honest motorists and to justify premium increases.
“It’s high time the insurance industry stopped their manufactured hysteria about fraud and concentrated on providing greater transparency so consumers can see if the ever growing premiums are justified,” Jones said.
The ABI has yet to publicly respond to the allegations of Thompson Solicitors. But on the same day that the law firm slammed insurance companies, the industry body revealed its plans to tackle car premiums.
In a report issued on Tuesday, the ABI laid out a five-point plan to ensure that motorists get fairer insurance deals.
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