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It was 2 years ago when I announced that the Government was to instigate a detailed report into the cost of insurance. The Competition and Markets Authority (CMA) were to carry out the investigation and over the subsequent 2 years it seemed as though the results and recommendations would be hugely beneficial to motorists as information leaked out.

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The two areas of major concern were (and still are) the cost of replacement vehicles and the cost of repairs, both of which were completely out of control and adding fortunes to drivers’ premiums. But sadly common sense has flown out of the window and the CMA has made a U turn on both of these critical issues.

The original proposal was to place a cap on replacement car costs and a cap on repair charges, both of which the CMA supported and seemed were working on them. However, it now seems that neither are to be implemented because ‘any changes would require full-scale law alterations and savings would be minimal.’ I would add that this report has cost the Treasury £millions and for what?

I am confused as to how a cap on repair costs and a cap on charging for replacement cars would result in ‘full-scale law alterations.’ I could write the bloody changes myself in an afternoon and who would resist the proposals. This must surely call into question the integrity of those carrying out the investigation. And why did it take two years and several millions of pounds to come to that conclusion?

Even the Association of British Insurers (ABI), whom one would assume would defend the way in which its industry works has criticised the report for failing to tackle the excessive cost of replacement cars, saying that this failure would be ‘a bitter pill to swallow for honest motorists.’ This has simply handed those who provide replacement vehicles, such as accident management companies, an open chequebook to continue charging extortionate hire charges.

The ABI appear not to have commented on the capping of repair costs, which may be a more difficult problem to be solved, but it clearly costs more than it should and was another major issue to be addressed that was avoided. Unbelievably, I was not aware that agreements existed between the insurance comparison sites and their advertisers that the advertisers would not advertise cheaper rates elsewhere.

The fact is that I have found the cheapest rate in the past on a comparison site then approached the insurance company direct and achieved a better rate. So this move is hardly likely to make a lot of difference to premiums as many people stay on the comparison site once they have found the most suitable product. Consumers will now receive more information with regard to no claims bonus protection and the CMA has asked the Financial Conduct Authority to look into the way that insurers inform customers of policy add ons (smacks of PI).

Janet Conner, MD of AA Insurance suggested that the changes should save motorists about £20 a year but she questioned the way that the investigation was carried out and if it could have been better approached from a different angle.

Alasdair Smith, CMA deputy panel chairman defended the meagre proposals by saying, ‘These changes will benefit motorists who are currently paying higher premiums as a result of the problems we have found.’ You may have found them my friend but it would seem that you have done precious little to resolve them. Yet another example of jobs for the boys. By Graham Hill