Leading UK broadsheet the Daily Telegraph needs to decide whose side it’s on. For some reason best known to its wayward editorial staff, the paper has been flirting giddily with cheap anti-capitalist populism, and it’s not been a pretty sight!
In recklessly reporting (and/or concocting afresh) vile slurs to the effect that insurers are somehow themselves to blame for ever-increasing insurance premiums, the paper is putting shareholder returns directly at risk.
Late last month the paper published the results of a so-called investigation alleging: “Drivers overcharged for motor insurance as firms use secret deals to inflate repair costs by up to 100pc”.
What next: headlines proclaiming “Jeremy Corbyn not that bad” or “Time to forgive Lib Dems over tuition fees”?!
Absurdly, the Telegraph ‘investigation’ claims that insurers routinely incite repair firms to “inflate” other insurers’ customers’ repair costs “while receiving undisclosed kickbacks for the difference”.
How very disappointing indeed it is to see a once reputable paper indulge in such nonsensical and irresponsible hysteria!
Let’s be clear: so foreign is the concept of a ‘kickback’ to insurers, that most of them don’t even understand the meaning of the term. If you were to say kickback to an insurer, they would probably think you were talking about kicking someone’s back or something.
But overexcited Telegraph hacks are not about to let cold hard facts like that stand in the way of a sensationalist story. Oh, no! They’d rather pretend insurers “rip off” rival insurers whose customers are “at fault” in an accident by telling repairer to “whack a bit on” to their repair bills.
Conjuring from this assertion the kind of figure that, frankly, belongs on the side of bus, The Telegraph extrapolates that such supposed shenanigans add £750m to the cost of UK motor accident repairs bills, or 5% to every motorist’s annual premium.
Fortunately, insurer body the Association of Brush Insurers (ABI) has stepped in to put the Telegraph straight.
Basically there’s nothing to see here, an ABI spokesperson explained to anyone who would listen. It’s a bit complicated, but essentially it’s perfectly normal for faultless insurers to get some kind of a bulk discounty thing on getting repairs done to faulty drivers’ motors, and then maybe or maybe not pass that discount on to faultsome insurers, but it all kind of works out fine in the end, and there’s no reason anyone should be in the least concerned or suspicious.
In any case, the spokesman, added, moving swiftly on, “repair costs still contribute less than a fifth towards the cost of a motor premium” which he dismissed as “a drop in the ocean compared to the impact on motor premiums arising from the increasing complexity of repairs, the rise in Insurance Premium Tax, changes to the Discount rate and whiplash-related claims” which, he said, account for a third of the total premium cost.
And he’s right, look:
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