By: 12 March 2017
ABI reaction to Discount Rate cut portrays insurers as shallow, self-interested and heartless, says ARAG

The ABI’s attack on the cut to the Discount Rate has done nothing to improve public perceptions of insurers and left the impression of an industry that is shallow, self-interested and heartless, according to ARAG.

The ABI has said that the Liz Truss’ decision to reduce the Discount Rate from 2.5% to minus 0.75%, is “crazy” because it will apparently costs motorists an extra £75, but Tony Buss, the managing director at ARAG, has said that the ABI’s message has shown no apparent compassion and little acknowledgement of the seriously injured victims whose futures would be made marginally easier by the reform.

Buss said that the public perception of insurers putting profit before people, sales before service and declining claims wherever possible would be even harder to shake off given the ABI’s stance.

“We know this is an easy falsehood that belies a far more complex truth, but such perceptions are harder to dispel when the industry is seen to fight so aggressively against the interests of those it claims to serve,” said Buss.

“Maybe the formulae used to compensate victims are flawed and certainly the suddenness of the announcement doesn’t seem to have helped anyone. But the clamour to decry a decision that was made solely to make justice that little bit more just does not reflect well on our profession.”

Buss added: “Sometimes, in the rush to protect the industry’s interests, it seems that its purpose is forgotten. Insurance is supposed to protect those most in need, at the expense of the more fortunate.

“The people who will benefit from the discount rate reform are among the most vulnerable in our society. Children injured at birth and motorists left paralysed after an accident should now have the money to fund their care adequately, as they age.”