Media Information

The Executive Committees of the Accident Management Association (AMA) and the National Association of Credit Hire Operators (NACHO) have agreed proposals to merge and have recommended acceptance to their respective memberships.This would provide one association to represent and promote the credit hire/credit repair market with at least 65 full members and 25 associate members. Members are expected to account for 90% of the market. It is hoped that some CHOs that are currently not in AMA or NACHO will decide to join.

Tony Baker, AMA Director General, commented:

“We have been working on the merger proposal for some time now. The level of co-operation, the spirit of co-operation and the clarity of agreement on areas of policy and principles between NACHO and AMA has galvanized the two Executive Committees.”  

Ralph Ferguson, NACHO Chairman, added:

“With the recent corporate governance changes introduced within the GTA, this merger is absolutely the right thing for both the industry and for all of our members.” 

There will be a short consultation period with the expectation of working to complete all aspects of the merger in the next three months, with the new association operating fully with effect from 1 June. In the meantime the two associations will continue to work very closely together.

The initial, key objectives for the new association are proposed as:

• A commercial initiative(s) to try and remove frictional costs from the GTA to the mutual benefit of insurers and CHOs and to help ensure CHOs retained more responsibility for their own destiny.

• Initiatives to deliver a speeding up of GTA payments by insurers to improve CHO cash flow.

• Improved performance in the GTA Technical Committee and a successful implementation of the new governance arrangements.

• Speedy and successful resolution of the 2010 GTA rate review.

The Chairman for the new association will be elected from members of the AMA and NACHO Executive Committees. It is proposed that Tony Baker (Currently Director general, AMA) should be the Director General with Barry Bromley (currently Secretary, NACHO) Membership Secretary.

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Enquiries to:

AMA - Tony Baker (01920 465000 / 07725 462 528)

NACHO - Ralph Ferguson (01827 319416/ 07733 002 003)

Accident Management Association

             25 November 2008

News Release 

When it comes to the crunch on credit!

The Accident Management Association (”AMA”) today called on insurance companies to work more closely with credit hire operators to settle claims quicker and more efficiently in order to minimise claim costs and reduce the escalating number of claims going to court.

AMA confirmed its unqualified support and commitment to the Association of British Insurers General Terms of Agreement (”GTA”) which establishes best practice and rates for the provision of replacement vehicle services to customers involved in road traffic accidents where the costs are recovered from the insurer of the negligent party

Tony Baker, Director General of the AMA, commented:

“The GTA aims to be beneficial to all parties involved - customers, insurers and credit hire providers. However, it is not working as effectively as it should as insurers are not committing enough resources to check and process claims as required in the agreement. This is leading to delays, increased litigation and higher claims costs. Insurers can save tens of millions of pounds a year by getting their act together and thus avoiding penalty charges and legal costs. Inefficient insurers are adding to the cost of motor insurance.”

Established in 1999, the GTA is a protocol between the majority of UK insurers and most of the credit hire industry which defines the process for managing claims involving the need for a hire car following an accident. In that protocol, insurers acknowledge that by collaborating with the hire company they gain administrative efficiencies, careful monitoring of claims and cost savings as hire charges are submitted at rates which are agreed annually by credit hire companies and insurers.

In addition, and as part of subscribing to the protocol, credit hire operators ensure that they both comply with the professional standards required and operate their business in a manner which is consistent with the objectives of reducing the total direct and indirect costs of accident claims.

The GTA requires insurers to process claims in a month or otherwise pay agreed set penalty charges of up to an additional 15% of the costs. If they fail to settle the claim within 90 days, then a credit hire company can issue on the claim at their commercial rate.

A recent survey of credit hire providers has shown:

• The great majority of insurers fail to pay claims within a month so most insurers are paying significant penalty charges for late payment.
• On average over 30% of claims are unpaid after 90 days forcing the credit hire provider to take legal action for recovery.
• Where legal action is taken insurers on average pay about a quarter more than the rates in the GTA and have significant additional costs as invariably they have to pay their own as well as the credit hirer’s legal costs.
• The main reason for delayed payment is lack of insurer staff resources and training.
• Credit hire has been expanding by over 20% a year as increasingly insurers are referring clients to credit hire companies for the provision of a fast and efficient service. However, insurers are not gearing up to deal with the resultant claims.

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Notes for Editors

1. Enquiries to:

Tony Baker

Director General, Accident Management Association

www.amassociation.co.uk

Email: thetonybaker@gmail.com

Tel: 01920 465000

2. AMA has 31 members who account for around 70% of credit hire and credit repair business in the UK.

3. The credit hire industry provides a service to people by assisting them with an insurance claim where their vehicle has been damaged in a motor accident.  The main elements of the service are the provision of a replacement vehicle (credit hire) and arranging repairs (credit repair). The turnover of the industry is thought to be in the region of £900 million a year.

News Release – 10 July 2007The Accident Management Association (AMA) today called on the Ministry of Justice (MoJ) to rethink its proposals for the reform of the claims process for personal injury claims.

Tony Baker, Director General of the AMA, commented:
“Faster, fairer, easier and more cost effective processes are great aims in seeking to reform the personal injury claims market. But the Ministry of Justice proposals are defective in key areas and must be reworked.
The MoJ must pay careful regard to the representations it receives and present fresh proposals that preserve good access to justice and fair levels of compensation. ”

The MoJ published a consultation paper “Case track limits and the claims process for personal injury claims” on 20 April and sought views on major reforms to the system and process for delivering personal injury compensation.
AMA‘s representations welcome several of the MoJ aims but highlight four major areas of importance where a change of view is essential:

1. In setting fixed costs there must be an adequate allowance included for the cost of acquiring claims and/or marketing services. Virtually every business has a cost in acquiring customers. If no allowance is made for referral fees in setting costs as the MoJ suggests, genuine claimants will be adversely affected as many claims emerge from businesses set up or operating so as to capture claims.

There would be no incentive for businesses such as accident management companies to continue to provide a service so many potential claimants will not be compensated.

2. The tighter timescales to be followed in processing claims are welcome but there must be a realistic sanction on defendants/TP insurers to encourage compliance with the timescales. The MoJ seem to be soft on the activities of defendants/TP insurers. A failure to decide on liability within the set time limits must not prejudice claimants. They must be able to proceed with their claim under existing rules and without the constraint of fixed fees and no After the Event (ATE) insurance protection.

3. The consequences of preventing most claimants from having an ATE policy with a recoverable premium have not been adequately thought through. Even when liability is admitted, claimants and solicitors will face risks and without insurance protection.
ATE insurers will effectively be selected against by only being able to insure high risk cases and this would make ATE a very unattractive market to be in. Premiums will need to be dramatically increased and this may lead to challenges on recovery. At best the proposals will result in uncertainty and instability in the market with most probably a big reduction in market capacity. Claimants needing ATE protection could find it much more difficult to obtain.

4. There are a large number of initiatives already under way on personal injury claim management including the Compensation Act, tighter regulation of solicitors and fast track claims and fixed costs. These should be allowed to bed down before even more change is introduced. The rights and interests of claimants are much too important to rush through further changes that are not robust and fail to recognize the practicalities of the claim process.
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Notes for Editors
1. The Accident Management Association was established in March 2001 as a new trade association to unite the credit hire industry. AMA members provide services to motorists involved in accidents that are not their fault. These services include replacement vehicle hire, vehicle repair and legal expenses insurance. Today AMA has 30 full members and they are estimated to account for over 60% of the credit hire and credit repair market in the UK.
2. Copies of the full AMA response to the consultation paper are available from Tony Baker.
3. Further information:

Tony Baker (Director General, AMA)

Tel: 01920 465000. Mobile: 07890 711797

Email thetonybaker@gmail.com

Web: www.amassociation.co.uk