An influential forum has called for insurance and credit hire companies, which have traditionally been adversaries, to form partnerships based on fairness and trust.

The Fleet Progression Forum said the only way to overcome present difficulties is to ensure that all parties have access to all relevant information at the beginning of a claim, and that an appropriate replacement vehicle, length of repair and associated costs are agreed at the outset.

This should be supplemented by mutual incentivisation where insurers receive a discount on early payment.

This would mean insurance companies can keep their costs to a minimum, while credit hire companies will get prompt payment and retain regular cash flow, and most importantly, customer service standards will improve.

The adoption of this bilateral agreement would create a group of best practice companies that could set new benchmarks for the development of the industry.

Members of the forum, which was established by FMG Support, concluded that the current General Terms of Agreement (GTA) is not sufficient to solve the issues relating to margin, hire duration and daily rates that rage between insurance and credit hire companies

The forum, which met to discuss solutions to improve working practices, also concluded that the negative reputation associated with both industries is due to the behaviour of a few companies that operate unethically.

The forum’s members, which include among them Fleet News editor, Martyn Moore, stated that as well as committing to a bilateral agreement, they should also work together to expose these companies and pressure them to change.

"Getting these people around a table is a good first step, and although those attending have good intentions, others now need to join in to make it work.

"Other sectors with similar problems have found solutions – Thatcham's work with repairers, for example, or the BVRLA's efforts around contract hire brokers,” said Mr Moore.

"Then there's the way we have agreement around the size of personal injury claims in this country.

"All this suggests that it should be possible to make the insurance/credit hire relationship work."

The meeting, which was chaired by the Rt Hon Michael Portillo, also included representatives from leading insurance, credit hire and associated organisations including Zurich, Royal Sun Alliance, Enterprise Rent-a-Car and Thatcham.

Stefan Rodgers, head of marketing and product development, FMG Support, said: “The willing is there within both industries to improve relationships.

"Ultimately, all parties want the same thing, which is to improve customer service standards within the industry; this is the way to achieve it.”