Cameron's intervention in the whiplash debate is a game changer

The Prime Minister's sudden intervention in the debate about motor insurance costs and, specifically, the contribution of the steep increase in whiplash claims to rising premiums is a real game changer. I can imagine the top brass at the Association of British Insurers dancing a jig of delight around their Gresham Street HQ when the invitation to meet David Cameron arrived.

The Prime Minister has clearly decided he is going to take some action on this issue as he has chosen a high profile approach. Downing Street has a discreet back door as well as a very public front door and if the PM had merely wanted to get better informed on the issues, explore whether solutions were available and see if the various interested parties could be persuaded to work together to find a way of curbing the claims costs and associated premium increases he would have ushered in a more diverse group through the back door and most of us would never be any the wiser that a meeting had taken place. Instead, later today, the ABI and a group of leading insurers will arrive at the front door and, crucially, there appear to have been no invitations issued to advocates of the claimant perspective. I expect that there has been a barrage of calls to the PM's office today from lawyers trying elbow their way in on the meeting. The bitter complaints from the Law Society about being excluded tell a a crucial story.

That story, quite simply, is that the Prime Minister has already decided he is broadly on the side of the insurers and that he accepts the broad thrust of their proposals for remedying the problem. These have been well rehearsed elsewhere. The insurers must brace themselves for being asked to pay a price for this Prime Ministerial support, however. I expect that will come in the form of an immediate voluntary ban on accepting referral fees - in advance of legislation - and a firm commitment to invest in telematics and better training for young drivers.

Whatever the outcome of the meeting it is a splendid feather in the ABI's cap that its sustained lobbying and publicity campaign has paid off so handsomely. It is now a case of watch this space.

14 Feb 2012