‘Personal injury lawyers are quite right to describe as “deluded” the notion that motorists will pay lower premiums as a consequence of the road traffic accident reforms. The powerful insurance lobby is not generously funded to penetrate the heart of government for reasons of altruism. Sometimes the simplest explanation is the right one.’

Paul Rogerson

Paul Rogerson

I wrote those words in this column seven years ago, but claim no credit whatsoever for any foresight. One didn’t have to be (the now sadly late) Mystic Meg to deduce that the insurance industry’s relentless lobbying was solely concerned with shoring up corporate bottom lines.

Here we go again – and how. The Association of British Insurers this week unveiled a ‘10-point plan for reducing motor premiums’, which have rocketed to unprecedented highs in the last two years. Among the proposals are new caps on damages for injuries beyond whiplash, which is already subject to a tariff.

Chucking in the kitchen sink – well, why not? – insurers also want another review of the discount rate.

My colleague John Hyde, who follows the personal injury sector, is also sceptical. ‘Consider that a Conservative minister *and* Labour shadow minister spoke at the ABI conference today, and you can see the influence insurers have,’ he tweeted this week. ‘General rule is that when insurers ask for something the government gives it to them within two years.’

Quite so, but not always. Hurrah for Liz Truss. (And there’s a sentence you don’t encounter very often.) It came as a very unpleasant surprise to the insurance industry when Truss, in her short stint as lord chancellor, changed the discount rate from 2.5% to -0.75%.

It is certainly true that the last two years have been among the most difficult the motor insurance sector has faced in recent times. But as EY reported in December, this has been caused by high inflation, growing material and labour costs, supply chain issues, pricing reforms, and changing driving habits post-pandemic. Not by people injured on the roads.

No matter. Don’t be surprised if desperate ministers looking at a heavy general election defeat dangle the carrot of further (illusory) cuts to motor premiums with more rhetoric about the ‘compensation culture’.

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