Motor vehicle insurance claims average €50 million annually

The four insurers supporting the Quality Vehicle Repair (QVR) scheme – Mapfre Middlesea, GasanMamo Insurance, Atlas Insurance and Elmo Insurance – have expressed their disagreement with the decision of the Office for Competition imposing interim measures regarding the operation of the scheme.

The QVR is a certificate awarded to panel beaters and paint sprayers whose garages have been inspected and certified that they are not only able to provide high quality vehicle repairs, but also ensure that safety standards are met.

Malta’s competition office, MCCAA, has allegedly found a “serious and irreparable damage to competition” by the island’s major insurance companies, who refused to pay for repairs on cars by unrecognised garages.

“The insurers will be considering all the circumstances to decide whether or not to appeal the decision. It should be pointed out, however, that this is only a decision on interim measures taken on a prima facie basis and, whether or not an appeal is filed against this decision, it is not a final decision,” the Malta Insurance Association said in a statement.

The scheme’s main objective is that of raising the standards of the repair industry in Malta by engaging an independent company, Cesvimap, to undertake garage inspections and assess the overall facilities of the repair centres.  

Cesvimap is engaged by a considerable number of European car manufacturers to carry out crash tests analysis and it is considered as one of the leading companies in its field.   Each inspection is carried out by a qualified and experienced repair service engineer and lasts a whole morning or afternoon.  

More than 200 garages have been inspected since the scheme was introduced in February 2016.

“The scheme is non-profit making and is heavily-subsidised by the insurers who finance the lion’s share of the expense involved in carrying out the inspections,’ Adrian Galea, MIA director general said.

“It is the repair industry itself that benefits directly since the scheme helps it to improve its standards and level of service. The certification that follows each garage inspection will assist in guiding the repairers to improve the standard of their workshops and work practices and recognises such investment by providing practical assessments and feedback through the professional certification process.”

Galea conceded that the investment benefits insurers indirectly because improving standards within the repair industry provides insurers with value for the money spent on claims, which average €50 million per annum.

“It also provides comfort to vehicle owners that their vehicles have been restored to their original condition without compromising on safety and ride comfort,” he argued.

Galea said that the four insurers are concerned that the decision of the Office for Competition will severely cripple the scheme and endanger its resultant benefits. 

“The scheme was open to all repairers, did not preclude car owners from deciding to use the services provided by repairers outside of the scheme and car owners can still recover their expenses from the insurer once fiscal receipts would have been presented.

“With all the talk and energy focused on the use of our roads and road safety, this seems to be taking matters a few steps backwards.”