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If anyone for thinks insurance premiums will be reduced as a result of these proposed reforms they are simply delusional and have no idea how the insurance market operates. All motor insurers are just about to vastly increase their premiums to take into account the changes to the discount rate of larger loss claims. This will affect all open claims market wide yet to settle and it will substantially affect the reserving positions.

Watch the press space over the coming days, you can expect several insurers to start issuing profit warnings to shareholders, a few have already started and it will get worse. There is absolutely no way motor insurance premiums will be reduced and I am amazed A2J are not addressing the of justice committee with this evidence. It is not that insurers don't want to reduce motor insurance premiums, it is that simply put, they can’t.
This would take the impetus out of the proposed reforms and the MOJ will quickly lose interest, as ultimately they and the insurance industry will not and cannot deliver what is being promised.
It really is time for insurers to be honest and stop misleading people about reducing premiums. Yes, we all acknowledge the PI system requires radical reform but this is best achieved by the both sides coming together and agreeing on a fair model, centred on access to justice, reducing costs and combating fraud that works for all.

Why don’t A2J ask the justice committee to put this question to every UK motor insurer in light of the discount rate increase and ask them to individually explain what the implications will be for average motorist and their future premiums?