Since Admiral announced that it will be offering refunds to all its motor customers, returning £110 million (an automatic £25 refund per vehicle), pressure on UK car insurers to make similar refunds has grown.
Reuters has now revealed that a group of lawmakers has added their voice to this demand, and said that British motor insurers should repay all or some of their premiums to customers because of a steep drop in car use and claims due to the coronavirus lockdown. The group of lawmakers said that car insurers have reported a drop in claims of almost 50% during the lockdown and that the British government had said driving was down by 75%, with insurers calculated to make £1billion in profit from the drop in claims.
The newswire reported on a letter, dated April 18, sent from a cross-party group of 27 MPs, mainly from opposition parties, which highlighted the financial challenges faced by families at this time and suggested that HM Treasury take action to ensure that UK insurance companies repay some, or where appropriate all, premiums to customers.
An emailed statement from the Treasury said: “We encourage all insurance companies to do everything they can to support policyholders. We are working closely with the sector and the regulators on what more can be done.”
With several major US motor insurers already offering credits to auto policyholders following a decline in use, more UK insurers are introducing measures at this time, with several already implementing measures that will pass on a number of benefits to customers or support customers who are facing financial difficulties including Hastings, Direct Line and RSA.
