Published 04/08/2014 00:00:00 in Press Releases

As part of its response to the proposed remedies issued by the Competition and Markets Authority (CMA) aimed at removing consumer detriment arising from the provision of motor insurance, the National Association of Bodyshops (NAB) has said that unless there is “root and branch” legislative reform, market dysfunction and consumer detriment will continue.

NAB makes its case following the CMA’s recent pronouncement that the Competition Act 1998 prevents agreement of general terms within the sector.  

“Remedies that are being proposed by the CMA are incapable of delivering meaningful consumer benefit if they cannot provide binding governance across all stakeholders,” says Frank Harvey Head of NAB.

“In various submissions previously made to the Private Motor Insurance Market investigation (PMI), the insurance industry has provided an insight into past voluntary attempts to mitigate excesses that have subsequently failed.  These submissions give an indication as to how divided and dysfunctional the motor insurance sector is.”

Throughout the PMI investigation, submissions made by various insurers have highlighted market polarisation and distortion operating in the insurance industry.  The submissions show marked divisions between those insurers who proactively distort the market and those who, through either lack of scale or because of a highly moral/ethical outlook, have been unwilling to engage in creative and opportunistic behaviour.

Measures adopted by some insurers to gain an advantage over their competitors highlighted by NAB include:

•           Differential experiences being offered between first party and third-party claims

•           Opaque behaviour in the disposal of write-off vehicles

•           Manipulation of referral fees

•           Earning rent from cost of claims

•           Overcosting of repairs

•           Operating Service Level Agreement requirements that create potential for future   repair quality issues

•           VAT avoidance

NAB suggests that the opaque behaviour of some insurers represents a barrier to new entrants and is detrimental to consumers because it pushes up the price of motor insurance.     

NAB has claimed throughout the CMA’s investigation into the Private Motor Insurance market that the insurer and associated sectors are conflicted and are incapable of operating in a self-regulated structure. 

“NAB’s submissions to the PMI investigation have consistently called for the appointment of a pan-industry adjudicator to uphold legal, ethical and moral behaviour in the sector,” says Frank Harvey.  “NAB has amplified its vision through proposals submitted for the establishment of ‘The Motor Insurance Conduct Adjudicator (MICA)’.”



NOTES TO EDITORS: The National Association of Bodyshops is the leading not-for-profit trade association representing the UK body repair sector. Its members include the UK's leading body repair centres and regardless of whether they are a large group or a small independent. Being a part of the NAB provides a repairer with a range of services which provide measurable benefits to support their business.

The NAB engages with all professional industry organisations, legislative bodies and government to ensure our members and the sectors' views are communicated and represented. The NAB is proactive in their support on initiatives and will always lobby on any initiative which results in a positive outcome for the UK Body Repair sector.

Rupal Rawal, Communications Officer
Tel: 020 7307 3412
Mob: 07528 977 157
Press Office direct line: 020 7307 3422
Press Office fax: 020 7307 3406

Web:  Email:

The Retail Motor Industry represents the interests of operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. The RMI has a formal association with the independent Scottish Motor Trade Association which represents the retail motor industry in Scotland.

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