An antitrust regulator in the U.K. is beginning a probe into the increasing private auto insurance premiums in the country, as a precursor to actions that may be taken to alter and better the way the marketplace functions.
The Office of Fair Trading (OFT) will examine evidence regarding the increases in price that occurred annually over a five year period and will work with the Financial Services Authority and the Ministry of Justice throughout this investigation. The OFT says that it will release its findings in December.
According to a statement by the OFT, its goal is to determine the complete facts, the explanations behind any increases that have occurred, and whether or not there are any competition or consumer issues which should be examined so that the market can better function.
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Over the last year, auto insurance premiums in the United Kingdom have increased by 40 percent, so that the average driver pays approximately $1,435. According to the Automobile Association Ltd., this occurred after a significant rise in claim costs and a spike in fraud.
These costs have been further fueled by insurers who have sold the details of customers to no-win no-fee lawyers who then use the information to push victims of auto collisions to make a claim on their policies.
The seventh-largest British auto insurer, Axa SA, has stated that it intends to lead the industry by example by prohibiting payments from lawyers to clients who have been the victim of an injury relating to an auto collision.