20 LV= Annual Report 2012
Regulatory uncertainty
As we enter 2013, the UK motor insurance Finally, we are concerned that the Government
market faces considerable uncertainty as a and the insurance industry have not yet been
result of planned or potential legal and regulatory able to agree a policy for insuring people who
developments. The most important of these is live in flood risk areas. The current ‘Statement of
the enactment, through LASPO, of the so-called Principles’ whereby insurers continue to offer cover
Jackson reforms to civil litigation costs and for flood risk properties already on their books,
funding. One of the objectives of these reforms ends in June 2013. Our commitment to continue
is to cut the legal costs associated with personal to offer insurance to all our existing customers
injury claims and to ban ‘referral fees’ paid to remains unchanged but we are working closely
organisations who introduce claimants to law with the ABI to find a solution to the problem
firms. We believe these reforms are essential faced by the wider market.
in order to address the dramatic increase in
spurious whiplash claims which has occurred over Looking ahead
recent years and which has driven up the cost of Despite the combination of increased competitive
insurance for honest motorists. pressures and an uncertain legal and regulatory
environment we are well positioned to continue
On the regulatory front, the motor insurance generating strong returns on capital from the
industry is currently co-operating with the general insurance business. We have built a
Competition Commission in a review which aims large and loyal customer base on the back of our
to identify possible anti-competitive practices in straightforward promises of great value and quality
the provision of accident repairs and car hire. service. This, combined with a team of exceptionally
We welcome the review as we believe it could be capable and committed employees, means we
effective in eliminating unnecessary frictional costs are well placed to make the most of opportunities
in our industry which have been a contributory which will emerge as market conditions improve.
factor to premium inflation over recent years.