10 March 2017
ABI message on the discount rate cut shows industry in a poor light
Leading legal expenses insurance provider ARAG plc has issued the following statement from Managing Director, Tony Buss, about recent media coverage of the Lord Chancellor’s decision to cut the discount rate applied to serious injury claims from 2.5% to minus 0.75%
“The cut to the discount rate applied to serious injury claims, announced by Liz Truss last week, came as a shock to almost everyone, and press offices across the industry immediately spun into overdrive.
If its lobbying appeared to have failed this time, the ABI PR team seemed to play a blinder, dominating comment in news stories, framing the argument and even, to some extent, dictating the language. But any sympathy or even recognition that the reform had been made to help those whose lives have been transformed by misfortune, was hard to find.
Many of the statements put out by insurers were careful to acknowledge that accident victims should be appropriately compensated, but the ABI’s focus on the “crazy” decision and the hike in premiums that would result, showed no apparent compassion and little acknowledgement of the seriously injured victims whose futures would be made marginally easier by the reform.
Maybe the formulae used to compensate victims are flawed and certainly the suddenness of the announcement doesn’t seem to have helped anyone. But the clamour to decry a decision that was made solely to make justice that little bit more just does not reflect well on our profession.
Time and again, key industry figures have spoken about a public perception of our industry, that sees profit coming before people, sales before service and claims to be declined wherever possible: All “Corporate” but not much “Social Responsibility”.
We know this is an easy falsehood that belies a far more complex truth, but such perceptions are harder to dispel when the industry is seen to fight so aggressively against the interests of those it claims to serve.
Sometimes, in the rush to protect the industry’s interests, it seems that its purpose is forgotten. Insurance is supposed to protect those most in need, at the expense of the more fortunate.
The people who will benefit from the discount rate reform are among the most vulnerable in our society. Children injured at birth and motorists left paralysed after an accident should now have the money to fund their care adequately, as they age.
By declaring the discount rate reform “crazy” because it will cost motorists an extra £75, the ABI has done nothing to improve public perceptions of insurers and left the impression of an industry that may be shallow, self-interested and heartless.”
Tony Buss, Managing Director, ARAG plc
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