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Ministers seek commitment to cut car insurance costs


Insurers are to attend a crunch meeting with ministers and civil servants this Wednesday where they will commit to reducing car insurance costs. The meeting, hosted by the Transport Secretary Justine Greening, will be attended by Otto Thoresen, head of the Association of British Insurers (ABI), and the chief executives of Aviva, Admiral and Zurich. It follows February's Downing Street summit on the rocketing cost of cover.

Insurers have already agreed to scrap controversial referral fees – the selling of information on people involved in accidents to no-win-no-fee law firms – but are now expected to show how they will cut premiums.

Malcolm Tarling, of the ABI, said: "The industry is onside when it comes to referral fees. Now we need to look at other ways to curb the compensation culture." Whiplash claims, in particular, which cost insurers £2bn a year, are in their sights. "It seems strange that as road accidents fall whiplash claims are soaring," Mr Tarling said.

Premiums for younger drivers is where most friction is likely to arise, with insurers accused by consumer groups of pricing the under-25s out of the market. David McMillan, the head of Aviva's UK general insurance, would like to see ministers agree to a tougher driving test and an end to crammer driving courses.