Motor Vehicles: Insurance

Ministry of Justice written question – answered on 12th January 2016.

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Photo of Catherine McKinnell Catherine McKinnell Labour, Newcastle upon Tyne North

To ask the Secretary of State for Justice, with reference to paragraph 1.143 of the Spending Review and Autumn Statement 2015, what assessment he has made of the extent of a fraud and claims culture in the motor insurance industry; and what evidence of such a culture he provided to HM Treasury before publication of the Spending Review and Autumn Statement 2015.

Photo of Dominic Raab Dominic Raab The Parliamentary Under-Secretary of State for Justice

The Government received and analysed data from numerous sources when formulating the announcement in the Chancellor’s Autumn Statement. The quoted figures were arrived at by combining published industry estimates along with data from government and other sources.

Government data, compiled by the Compensation Recovery Unit at the Department for Work and Pensions, indicates that claims volumes remain at historically high levels, some 50% higher than in 2006. Over the same period motor accident rates have fallen by around 26%. This is clear evidence that the system is in need of further reform, which is why on 25 November, in his Autumn Statement, the Chancellor announced tough new measures to control costs and reduce the number of unnecessary whiplash claims.

The Government will consult on the detail of the new reform package in due course and the consultation document will be accompanied by an impact assessment.

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