MAG TARGETS INSURANCE INDUSTRY
December 15 2003 MAG calls for inquiry into unfair practices by insurers

The Motorcycle Action Group (MAG UK) is calling for the Office of Fair Trading to investigate third party-only insurance, in a bid to end discriminatory practices it says are hitting two-wheeler sales and driving up the number of uninsured riders - now 23% - who
are riding untaxed machines.

MAG believes compulsory third party insurance is a licence for insurers to take excess profits from motorcyclists so long as a
handful of dominant firms can refuse to issue third-party-only policies. And MAG points out that UK law on motor insurance is unusual in providing for policies to cover riders rather than their machines.

The great majority of Britain's 1.3 million motorcyclists are insured by just three firms, with around a dozen others 'sharing the
crumbs'. The non-life insurance sector is largely unregulated. The Financial Services Authority will not begin to regulate motor
insurance until January 2005.

MAG claims insurers have increased motorcycle premiums because there has been too little competition, not because the risks of
underwriting losses have increased. High levels of two-wheeler theft have been blamed for premium hikes since 1991 - yet ABI members
' motorcycle claims actually decreased by 41% between 1991 and 1992, and dropped from 86,000 to 27,000 between 1990 and 2000.

According to MAG, the risk of theft has been greatly exaggerated as a reason to inflate motorcycle premiums. The latest available
Home Office data show just 0.9% of registered motorcycles over 400cc were reported stolen in the year 2000. These 5,736 stolen machines accounted for 20% of all reported motorcycle thefts. Scooters and mopeds accounted for 75% of all reported thefts in 2000.

A 2003 survey by MAG showed 54% of the respondents (n=845) with bikes over 400cc had five or more years' no-claims bonus on their
policies. Results from the survey showed that riders with bikes over 400cc pay insurance premiums very similar to those paid by
generally less experienced riders of two-wheelers under 200cc with less no-claims history.

The cost of Third Party only insurance can range from around #720 for 16 year olds to around #360 for 21 year olds who live in a
poor urban area and ride a 50cc moped or scooter. According to MAG, this high cost of insurance is a major reason for the massive
20% drop in moped sales.

Trevor Baird, Director of Public Affairs of the Motorcycle Action Group, said: "Compulsory third party only insurance should be available and affordable for all riders, and should not be abused by insurers to make excess profit. We call on the Office of Fair Trading to get to the bottom of this problem."