Transport Secretary, Louise Haigh and Economic Secretary to the Treasury, Tulip Siddiq have announced that they will form an industry taskforce comprising market experts, regulators and consumer champions in a bid to contain the rising cost of cover for motorists.

The government said the taskforce would include the Association of British Insurers, Citizens Advice, Which? and Compare the Market, as well as insurance regulators.

Haigh 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.”

Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations, believes the taskforce is not an effective means of assessing the market. He said: “It is regrettable that the promised CMA/FCA investigation, which would have been properly independent, has been shelved in favour of a largely industry-led approach.”

“Why ask the ABI to be at the centre of an investigation into its own members’ pricing behaviour? I have little doubt that they will blame everyone in the claims supply chain for their own strategic failures.”

Other industry figures welcomed the taskforce. Colm Holmes, CEO of Allianz UK, and chair of the ABI sub-board committee on motor insurance affordability, said: “The taskforce is a clear step forward as we can make more headway on this complex issue if the industry, regulators, and government try and tackle it together.

“Though premiums are showing signs of falling, we want to ensure that direction of travel continues, and so we look forward to helping the taskforce explore all the challenges.”