20% cut in motor insurance possible within a year

Motor insurance premiums could be cut by a fifth if insurers widened access to a database of all the policyholders in the UK, a leading expert said today.

The latest research estimates that fraudulent claims and uninsured drivers cost the British motorist £1bn every year – or £60-70 for every car on the road.

Three months ago, the Insurance Fraud Bureau, was formed to tackle the problem by linking the industry’s three main databases – the Claims and Underwriting Exchange, Motor Insurance Anti-Fraud & Theft Register, and the Motor Insurance Database.

Yet, despite these proactive steps, insurers are actually hindering the process of identification, according to accident management specialists, Accident Exchange.

The firm, which handles over 100,000 accidents every year, says it is prohibited from sharing vital information with insurers at present, even though its front line intelligence is being used by Police Forces nationwide to help tackle the growing problems of fraud and uninsured motorists.

The Motor Insurance Database, which was launched in 2001 to help combat the growing plague of uninsured drivers, contains personal details of every motorist on the road. Under current rules, only insurers are able to update or review the database.

Even the Insurance Fraud Bureau, which is tasked with detecting and investigating organised fraud, excludes input and cooperation from the likes of Accident Exchange.

Despite the hurdles, the firm has played a pivotal role in assisting Police Forces smash criminal gangs operating in Birmingham and Luton in recent months.

With a proven track record, Steve Evans, chief executive of Accident Exchange, argues that businesses legitimately connected with the industry, like itself, should be able to add, or search for, information on these databases. “This would help us identify bogus claims and track trends before the crime has been committed,” he says.

The company, which counts Audi UK and the majority of the BMW dealer network amongst its clients, says the problem will not go away until insurers realise they need to re-write a “disjointed” rulebook.

Evans explains: “If we could view, and post details of suspicious claims, postcodes, streets and even mobile phone numbers at the time of the reported accident, the loophole currently being exploited will be dramatically closed.”

“At the moment, intelligence is far too restricted to proactively dent the criminal activity.”