Insurance Industry caught selling claims
As reported by the BBC the Insurance Industry has been caught out this week making a mockery of its complaints about the UK’s alleged “Compensation Culture”.
For many years the Insurance Industry has been blaming its increased insurance premiums on “Compensation Culture” and has been lobbying the government to reform the “no win no fee” system used by lawyers.
Insurers want some of the compensation awarded to innocent victims to be used to pay their legal costs, saving the insurers money but depriving those injured in accidents of compensation they deserve. This despite the fact that insurance company profits continue to rise, with UK based insurer Aviva showing pre-tax profits of £2.4 billion for 2010, an increase of over a third on the previous year.
The truth is that government data shows that there is no compensation culture; advertising has, however, made people more aware of some of the companies dealing with accident claims.
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What has now been revealed however is that Insurance companies are actually encouraging accident claims, the very thing they complain about, by selling accident details to lawyers. The Transport Select Committee, in its report on the cost of motor insurance(2), has criticised the insurance industry for this practice.
The report notes that “Fees range on average from £200 to £1,000 per referral and there can be several referrals in relation to a single insurance claim”
The committee wants the Insurance Industry to clean up its act and concludes. “We look to the insurance industry to implement a more transparent regime for referral fees by the end of next year”.
In the meantime it is hoped that they may stop complaining about the mythical “compensation culture” and stop lobbying the government to punish innocent victims of accidents.
