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Smaller firms within the corporate accident management industry are set to exit the market in the wake of legislative changes surrounding referral fees and credit hire.
That's the view of the AA's head of accident management, Dave Bartlett, who believes that the sector is overcrowded with companies seeking low-risk business that don't necessarily offer what fleets need.
Speaking to BusinessCar, he said: "[Accident management] is such an overused term these days. So many companies profess themselves to be an accident management company but then only offer one part of the service [legal cover, car hire etc].
"I think as an industry we all want to look for that non-fault customer - but what about the fleet driver who's had a fault accident? What about the fleet driver who's reversed into a post?
"It's a fault claim, he doesn't want a hire vehicle because his boss will kill him when he incurs costs that he can't get back - I think when you look at this list of roughly 30 [accident management companies], 20 of them, go 'I don't want him, he costs too much'."
He added that reforms to legislation around referral fees and credit hire had put huge pressures on the industry, and were also likely to muscle smaller players out of the game.
"We're an industry that for so long has been reliant on referral fees to fund ourselves. It's not some secret, but in any service industry, if you pass work to a supplier in exchange for that you can derive an income.
"One of the biggest incomes that accident management companies derived was in respect of personal injury claims. From 1 April, that referral fee became illegal. When you lose an income stream like that it has an effect on your whole financial proposition.
"It's the same with credit hire, which has had some bad press. That's something that's under review at the moment. It's one of these products the industry has derived income from, which is under threat and challenge."
He continued: "I think what you're going to see is a lot of these smaller companies - or the companies that are only interested in one product - that have professed to being accident management companies, will start to say 'actually, this isn't a route for us any more' and what you're left with, really as a benefit to fleets, are the true accident management companies."
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