Written evidence from Nick Ross (CMI 24)
I have recently been made aware of your inquiry into
the cost of motor insurance and I gather the committee has extended
its deadline for submitting written evidence to Wednesday 15 December.
Accordingly I offer the following observations:
- ¾ Crime
is an important driver of motor insurance costs.
- ¾ Most
crime is driven by lax design of policy, products or services.
- ¾ The
three-quarters drop in vehicle theft since its peak in the mid
1990s has been driven overwhelmingly by design improvements (as
indeed has the cut in road fatalities from over 6,000 to rather
more than 2,000 - a trend kick-started by a campaign in which
I was involved in the 1980s).
- ¾ The
criminal justice system has little measurable effect on crime
rates and should not be regarded as an important lever for driving
down crime*.
- ¾ Most
politicians, police and members of the public have not grasped
this and continue to believe that crime is driven by bad people
rather than bad regulatory or corporate decisions.
- ¾ While
in general private enterprise is often culpable in promoting criminal
behaviour, in this case bad public policy is the key.
- ¾ In
2001, together with two energetic civil servants from the DTLR
and DVLA, I presented HMG with a comprehensive proposal to ensure
compliance with vehicle identification requirements. Ministers
accepted the "easy" options and balked at those requiring
political courage.
- ¾ The
impact of the new measures secured an immediate improvement in
motor insurance penetration.
- ¾ Adoption
of the more comprehensive package, one that defaults to motorist-compliance
rather than voluntary obedience, could ensure much higher penetration
of vehicle insurance and thus drive down premiums.
- ¾ By
cutting the number of "ghost" vehicles which are untraceable
and often without MoT, better regulatory policy is also likely
to reduce accidents, vehicle crime and crimes commissioned with
the assistance of vehicles.
- ¾ However,
better enforcement is unlikely to make a major difference in premiums
to young drivers where the actuarial risk is principally from
accidents. Since UK motor policies generally insure the driver
not the vehicle, improved regulation is unlikely to reduce the
problem of young people driving without insurance cover. Indeed
it might reveal a larger problem.
- ¾ Given
(a) that driving on public highways is a complex skill that improves
with maturity and practice, (b) the competitive nature of the
UK insurance industry, (c) the mounting costs of vehicle repairs
and injury claims and (d) the relative impotence of courts to
affect behaviour, improving insurance access to young drivers
can only be tackled by subsidising them, such as through State
subventions or fiscal dispensations (which would drive up taxes)
or by sharing the risk with others such as older motorists (which
will drive up their premiums).
I do not say this lightly. I presented the BBC's
Crimewatch for two decades. It was the revelation that
crime rates rise and fall independently of court disposals, and
the discovery that much thinking about crime owes more to voodoo
than science, that led me to found the Jill Dando Institute of
Crime Science at UCL and to seek firm evidence about cause and
effect (I am an honorary fellow of the Academy of Experimental
Scientists and a trustee of Sense About Science).
December 2010
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