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CMA Final_report Highlighted.pdf

Private Motor Insurance Market Investigation



7. We found that, in many post-accident non-fault claims, as a consequence of tort law, cost liability lies with the at-fault party in an accident whereas cost control lies with the non-fault party. This therefore leads to a separation of cost liability and cost control (‘separation’) in relation to most PMI claims (see paragraphs 26 to 42).3 We found that this separation, in combination with various practices and conduct, gave rise to inefficiencies in the supply chain for the provision of post-accident services to non-fault claimants. In our view, these features gave rise to an AEC as they distorted competition and caused higher transactional and frictional costs in the management of non-fault claims than would otherwise be the case. Ultimately this increased PMI premiums, especially for higher-risk drivers.