The group will be made up of industry experts from the Association of British Insurers (ABI), Citizens Advice, Which? and Compare the Market.
Insurance regulators including the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) will also be part of the task force.
It comes as the cost of motor insurance premiums has shot up by 23% in a year. The Government noted the current rate of price hiking “is far higher than in comparable economies such as Germany, France, Spain and Italy”.
The task force will identify factors that boost the price of motor insurance and will look at rising car thefts, potholes and inflation as part of their investigation.
As well as hefty premium costs, the Transport Secretary and Economic Secretary to the Treasury also hopes to make the prices fairer for those disproportionately hit with expensive premiums, including younger drivers, older motorists and those from ethnic minority backgrounds or on lower incomes.
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‘Committed to getting costs under control’
Louise Haigh, Transport Secretary, said: “Car insurance is an essential, not a luxury. It is vital to accessing economic opportunities, and this Government is committed to getting costs under control. That’s why we’re taking direct action to bring insurance companies and regulators round the table to discuss how we can crack down on spiralling costs.
“The rising cost of cover affects all drivers, but some groups have been hit harder than others. No matter your background or circumstance, this Government is determined to ensure drivers get a fair deal.”
Haigh added: “Our new expert task force is a major step forward in delivering a fair deal for drivers. It will give this issue the attention it deserves – rooting out the factors driving up costs for industry and ensuring drivers are able to hit the road.”
The announcement coincides with the FCA’s own review into whether customers receive fair, competitive deals from insurers.
The regulator announced it will be looking into customers who borrow money to pay for their insurance in instalments, which is known as ‘premium finance’.
Drivers who opt to pay monthly face paying up to £300 more than those who can afford to pay upfront.
The disparity was described as a “tax on being poor” by consumer champion and member of the new task force, Which?.
YourMoney.com asked the Department for Transport whether this would be addressed as well as the overall cost of the premiums, but has not yet received a response.
