Report comment

The absurd thing about all this is that the insurers don't even want these reforms.

Nobody seems to realise that insurers make little or no profit from underwriting. The real profits come from investing the premiums. So the higher the premium income the better, and this is why they were so happy to sell PI claims to solicitors.

Such claims are great for them, because they can legitimately demand higher premiums whilst crying crocodile tears about all these nasty claimants.

And the beauty of it is that they're all insuring the same market so all the insurers can increase their premiums without worrying too much about competition.

But of course they could never admit this, so with their public face on they sanctimoniously condemned whiplash claimants whilst at the same time flogging those same claims at a few hundred quid a time.

Unfortunately for the insurers (and for everyone else in this industry) the government actually believed what they were spouting and has brought in legislation that actually would reduce whiplash claims.

This is a potential disaster for the insurers, as their claims paid will diminish substantially. Competition will then force premiums down, which will leave them less to invest and then their bottom line really will suffer.

But they've painted themselves into a corner, and now have to carry on the agonising pretence that they really support all these government initiatives.

Be careful of what you wish for.