In the last 11 years, the cost of personal injuries has doubled to approximately £14 billion and fraud remains the biggest threat to motor insurers. One veteran insurance broker gives their opinion on both issues.
Riscx Insurance is a motor trade insurance comparison specialist in kent. The firm has been operating since before Labour legalised referral fees in 2004, so is well-positioned to comment on how the change affected the industry and how its impending ban could impact the modern insurance sector.
An 18% rise in personal injury cases between 2010 and 2011 cost the insurance industry an estimate of £400 million, according to a report by the Institute and Faculty of Actuaries. eQuote Direct has taken an honest standpoint on the stats – recognising how the vicious cycle of referral fees has eaten away at the insurance industry ‘from the inside-out’.
Also, eQuoteDirect is keen to remind businesses that the best way to find an affordable commercial insurance package, is to work with a broker. The brokers are connected to multiple insurers and negotiate deals with these, on the client’s behalf – meaning they can identify and liaise with the insurers who are countering fraud and keeping their premiums reasonable.
A spokesperson for Riscx commented:
‘The combination of organised fraud and referral fees has developed into a real parasite for the insurance industry. The money made on selling claimant information is negated by the money lost in that claimant winning their case – meaning some insurers are forced to keep selling information to keep up. Referral fees are eating away at parts of the industry from the inside-out.
‘Whereas the government have stepped in to criminalise the fees in April 2013, we still can’t stress enough how important it is to speak to the experts when it comes to insurance. Brokers are experienced and know how to connect your business with the insurers who aren’t caught up in the referral fee cyclone or anything that can affect your premium – making sure you’re never paying over the odds for your protection.’