Businesses are being warned that the price of motor vehicle insurance is likely to rise significantly as an unintended consequence of efforts to drive down private vehicle insurance costs.
The alert has been issued by the National Association of Bodyshops (NAB), which represents the UK’s leading body repair specialists, ahead of a report by The Competition and Markets Authority (CMA) – previously known as the Competition Commission – due to be published in September.
In September 2012, the Office of Fair Trading (OFT) asked the then Competition Commission to carry out an investigation into ‘the supply or acquisition of private motor insurance and related goods or services in the UK’.
“The Competition Commission’s investigation into private motor insurance costs could end up costing consumers via rising vehicle insurance costs for businesses,” warned Frank Harvey, head of NAB.
“We have said from the outset that this investigation is flawed because it focuses only on private car insurance. If insurers are faced with reduced profits from consumers, they’ll inevitably try to recoup margins elsewhere. Vehicle insurance cost increases for businesses is a likely outcome.”