Draw your insurer's attention to the area of damage on your vehicle compared to the area of damage on his vehicle. This will validate your explanation of the incident circumstances. Even though the two witnesses are known to you, they can still be used. It is reasonable in the eyes of the court for you to know your neighbour. It's his responsibility to ensure the road is clear prior to him reversing onto it. Ignore his insurance company, they know he is at fault. Speak to your own, or issue proceeding via the small claims court naming him directly as being responsible for the damage to your car.