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Arc Legal Assistance (Arc Legal) has welcomed the publication of the Competition and Markets Authority (CMA) final report on its investigation into motor insurance, but questioned whether the publication of claims ratios at the point of sale would provide an accurate measure of the benefits of a Motor Legal Expenses Insurance policy to reflect the true value of the product.
Commenting on the report, Richard Finan, Director of Arc Legal, said: “The publication of a claims ratio will not reflect the true value that customers receive under this product. It will not include aspects such as the services provided to customers which are not shown as payments by underwriters. Other factors such as the overhead in running uninsured loss recovery cases and the legal costs incurred by solicitors in personal injury cases which in most instances are ultimately recovered from the opponent, but are funded under the policy during the life of the claim, need to be taken into consideration to truly demonstrate the value to consumers.
“We are developing management information tools with our trading partners to capture this information enabling us to provider a clear and accurate picture on the performance and value the product is delivering.”
Commenting on the wider points relating to add-ons Finan continues: “The CMA have reached similar conclusions to those of the Financial Conduct Authority in their recent add-on review. This further reiterates the importance of providing clear product information to customers at the point of sale. Arc Legal continues to place a strong emphasis on supporting our broker and insurer clients with staff sales training and the provision of marketing literature to demonstrate the value of legal expenses insurance to customers.
“The level of investigation and scrutiny of the add-on market has helped to highlight the need for change by some in this sector. However, many of us have already addressed these issues, and are looking forward. Arc Legal we are continuing to work closely with our partners to develop products that will meet regulatory requirements and customer needs in the future.”