Annual Round-up

Chair and CEO Anthony Hughes rounds up the credit hire industry for 2023.

It’s been another year of change in the credit hire market, driven by a volatile economy, inflationary pressures and continuing turmoil in the motor claims supply chain. That volatility looks set to continue into 2024, not least because the UK economy is expected to remain subdued next year, and inflation, while coming down, is unlikely to reach the Bank of England’s target 2.00% until well into 2025. We have seen the fall out from claims inflation in the insurance industry, not just soaring motor premiums but also corporate activity among the insurers. Penny James has been replaced by Adam Winslow at the helm of DLG, which sold the NIG to RSA. RSA itself came out of personal lines with the sale of its home and pet business to Admiral.

The government has continued to press ahead with its reform agenda, which is essentially an exercise in saving money. The new fixed costs regime was implemented in civil justice in October, and as things stand, fixed costs are expected to be introduced for fast and multitrack cases up to £100K next year. Meanwhile, the number of RTA claims registered to the Compensation Recovery Unit (CRU) is a quarter down on the pre-pandemic period, despite a return to normal traffic levels, and the OIC continues to disappoint as a user-friendly claims interface. Only 10% of claimants register to use the service as LiPs. Record court delays in the civil justice system complete the picture of a claims industry battered by poor policy decisions and macro-economic factors.

All the while the FCA tightens the ratchet for the way the industry handles customer experience. The Consumer Duty represented one of the biggest changes in years to the way insurers are required to look after their customers. It is something of an irony that, for all that insurers state that the customer journey is their top priority, it is the regulator which, in truth, acts as the ‘white knight,’ forcing a more customer focused approach to the way insurers deal with claims.

Next year, there will almost certainly be a general election, and it is odds-on that the Conservatives will be out of power. Rachel Reeves, likely to become the first female Chancellor of the Exchequer in a Keir Starmer government, has already made clear that she won’t be opening the chequebook, and even if she did, the claims and justice sector is well down the list for taxpayer largesse.

What we really need, in my view, is a period of stability and consistency in the way we are governed. Businesses cannot invest for the future if they have to navigate their way through constant change and the chronic uncertainty that brings. Running a business is hard, but it is immeasurably tougher when we live with a constant diet if regulatory and legislative change. Top of my list for 2024, then, is for the authorities to keep out of the industry.

I’m also hopeful that next year will bring a successful conclusion to the GTA2 discussions, and we are able to sign an agreement to bring the operation of the GTA into the here and now. I’ve been pleased with the level of commitment from all sides during 2023, and I am convinced that, with adults in the room, we can get GTA2 across the line, underlining yet again that the era of conflict and friction, pre-Covid, has given way to a more consensual, collegiate approach to self-regulation.

Nevertheless, we are living through very uncertain times, and looking ahead, there are no guarantees that we won’t be blindsided by events.

With this in mind, I’m hoping that you manage to turn off the email, shut the laptop, put your mobiles on silent and take a well earned break from everyday business during Christmas and New Year.

On behalf of all of us at the CHO, I wish you and your families a happy Christmas, a relaxing holiday, and a prosperous and healthy 2024.

Anthony Hughes
Chair and CEO