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Insurers v motor repairers: were there any winners?

car accident

This week's meeting of the All Party Parliamentary Group on Insurance & Financial Services to explore some of the allegations made in the recent Channel 4 Dispatches programme about the relationship between motor insurers and repairers turned out to be a remarkably civilised affair.

With both the principal accuser – Andrew Moody of Retail Motor Law – and the principal accused – Direct Line – present it had the potential to generate rather more heat than light. That it didn't lurch in such an unconstructive direction is down to the presenters who were straightforward and factual, almost at pains to avoid any name calling, and the skilful chairmanship of Jonathan Evans who knew just when to bring the speakers back on the straight and narrow of the meeting's main purpose.

Did it achieve much? That is always hard to answer but I think it is likely to prove very helpful as this debate develops and as the Competition Commission investigation gathers pace.

We did learn that the Commission will have in front of it a formal complaint from Retail Motor Law and the Vehicle Builders and Repairers Association regarding price fixing in the supply of paint against RBS Insurance, Akzo Nobel (the world's largest paint company) and distributor ACIS. The group's chairman, Jonathan Evans, curtailed discussion of this at the meeting but it seems certain to come up when the Competition Commission reports, if not before. It goes without saying that all three strenuously deny the allegations.

Much of the discussion at the meeting focussed on the ability of policyholders to choose their own repairers, also one of the key issues picked up by the Channel 4 programme. I am not personally convinced that this is such a big issue for policyholders.

There were quite a few references to the pre-approved repairer network days when you took your damaged vehicle to one or more (often three) repairers, obtained quotes and then insurer approval. If the repair was expensive then you might have to wait for an engineer (frequently mentioned during the presentations) to turn up and approve the estimate and scope of work. All very time-consuming and tedious.

I was struck by Steve Maddock's snapshot of Direct Line's customer complaints which put the length of time a repair was taking at the top of the list. The approved repairer networks have done alot to cut the time and inconvenience of getting your car repaired so I am not sure how many consumers would welcome a return to a system nearer to the old one. That said, people should be able to nominate their own repairer and expect insurers to facilitate that subject to satisfactory reassurances about quality, standards and costs. Mr Maddock certainly got the point across that Direct Line could not be faulted on this point and that Dispatches didn't produce any evidence to show that they blocked people wanting to use their own repairer.

Consumer choice is obviously important and I hope other insurers are as careful as Direct Line to make sure they do not place unncessary impediments in the way of those - I suspect very few - consumers who want to choose their repairer.

The accusations about the impact of bulk buying deals on price and whether there is an element of price-fixing involved were never, as the chairman pointed out, going to be resolved in the conetxt of a meeting with MPs. They are serious allegations and we have to hope that the Competition Commission is thorough in its investigation of them.

The discussion covered a range of other issues and these are briefly summarised in the notes I made of the meeting. Meeting notes 28/01/13

Some of the issues raised have also been covered elsewhere

Price-fixing claims refbuffed

Retail Motor Law's case RML press release

Direct Line's response

Delay to MoJ reforms


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