Arc Legal Assistance has questioned whether the publication of claims ratios at the point of sale would provide an accurate measure of the benefits and value of a motor legal expenses insurance policy.
Arc Legal, a London-based provider of legal expenses insurance and assistance services in the UK and Republic of Ireland, was commenting on one of the findings of the Competition and Markets Authority’s (CMA) final report on its investigation into motor insurance.
“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,” said Richard Finan, Director of Arc Legal.
“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,” he continued.
“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.”
Source: Arc Legal Assistance Ltd
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