Aviva's chief executive has expressed criticism of Labour's proposed measures to address rising motor insurance prices, calling the strategy “fundamentally flawed.”
During the Financial Times' Global Insurance Summit in London, Amanda Blanc, head of one of the UK's largest motor insurers, objected to the idea that there is a problem with pricing in the market.
“If you look at prices relative to where they have been, five, six, seven years ago, [prices] were not [high]… The motor insurance market is incredibly dynamic. There are lots of players in it. It’s highly competitive,” Blanc said.
Her comments challenge Labour’s planned crackdown on the motor insurance market, with both the CMA and the FCA getting involved. Blanc said that while there may be actors that take advantage of the market, the party’s approach is akin to taking a “sledgehammer to crack a nut.”
“It’s the same thing on things like premium finance; if you look at average premium finance rates, there’s a huge range of rates which range from our average of 15%, to others which are much higher,” she said.
Read More: 2023 a record year for motor payouts – ABI
While the FCA reiterated that it is not a pricing regulator, concerns surrounding what a new government might do have sprung up. Blanc says that it comes down to being “very careful,” highlighting the new Consumer Duty as the framework for such matters.
“When investors are thinking about the UK, they used to say, this is an environment where we understand the regulation, we understand the rule of law, it’s a consistent and stable environment,” she said. “We need to make sure that the regulators are operating to their growth and competitiveness objective, as well as making it easy for the UK economy and businesses in the UK to be successful.”
The Labour Party has indicated that, if elected, it would address the rising car insurance costs.
“We will urgently call in the regulators to crack down on any unfair practices and to come clean on the causes of soaring costs for consumers,” Labour's shadow transport secretary Louise Haigh said.
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