The Association of British Insurers (ABI) have recently circulated a press release that highlights tackling the ‘compensation culture’ in Ireland led to a drop of 16 per cent in the cost of Irish motor insurance premiums.

Director General of the ABI, Otto Thoresen, believes that there is an ‘urgent need’ to reform the compensation system that exists in the UK, which could lead to a significant drop in insurance costs. He said, “Rising claims costs from personal injury claims, excessive legal costs, insurance fraud and uninsured driving, coupled with lower investment returns in recent year, have unfortunately led to rising motor insurance bills for many customers. In fact, the motor insurance sector has not been profitable for the last sixteen years because the amount paid in claims and expenses has been greater than that received in premiums.”

The government in the UK is trying to cut the costs involved in running a vehicle by fighting insurance fraud by introducing a national insurance Fraud Register to track down known insurance cheats and has offered funding to run a unit based within the City of London police to investigate bogus insurance claims.

They also hope to help young drivers by introducing certain car insurance quotes that are specifically designed to ensure insurance is cheaper for younger or novice motorists.

There has been a call for government reforms to tackle the costs and compensation culture, as when these kinds of reforms were introduced in Ireland, motor premiums dropped by 16 per cent.