.jpg)
If motor insurance costs were a car, it would look like the brakes had stopped working.
Premiums for all types of motor insurance – personal, commercial, and fleet – accelerated in the last quarter of 2017, according to the Insurance Price Index from the British Insurance Brokers’ Association (BIBA) and Acturis. The index tracks £6 billion of actual premiums paid every year through insurance brokers before Insurance Premium Tax (IPT) is added.
Who felt the strongest impact? Car and van drivers, apparently, with premiums seeing consistent increases last year and fourth quarter costs posting 10.7% and 9.1% climbs, respectively.
“There are a number of reasons that motor insurance premiums have risen and BIBA is campaigning on all of them,” said BIBA executive director Graeme Trudgill. “We are pushing for legislation to be passed via the Financial Guidance and Claims Bill which will bring claims management companies under the regulatory auspices of the FCA.”
In addition, BIBA is awaiting the progress of the Civil Liability Bill – the rate of fraudulent claims expected to be reduced when the Insurance Fraud Taskforce’s recommendations are implemented.
“We also fed into the Government review of changes to the compensation discount rate and are calling for legislation to be brought forward that will implement changes that will ensure the principle to the 100% compensation for injury claims is met,” noted Trudgill. “And finally, BIBA has long campaigned for a fair system of taxation.
“We believe that Insurance Premium Tax is a tax on protection, and is now at a level that impacts the uptake of insurance. We want the Chancellor of the Exchequer to commit to no further increases in this regressive tax.”
For Acturis co-chief executive Theo Duchen, the increases are big for any individual or business to take on. “We are in a period of great uncertainty in the UK, and I support BIBA’s call for a period of stability with no further changes to Insurance Premium Tax,” he said.
Meanwhile the Association of British Insurers (ABI) reported that the average cost of a motor insurance claim, at £2,936, has surged to the highest level on record.
“Putting a lid on excessive costs, which end up being paid for by motorists, remains a priority for insurers,” said ABI assistant director Rob Cummings, who is head of motor and liability. “This makes it all the more important for the Government to play its part, by pushing ahead with its reforms to personal injury compensation without further delay.”
