Last week, the insurance sector experienced a significant upheaval due to a global IT crisis. Experts from Consumer Intelligence are now advising policyholders to reassess their recent home and motor insurance quotes. This industry-wide alert follows a defective update issued on July 19th by cybersecurity company CrowdStrike, which adversely affected approximately 8.5 million devices globally.
The glitch caused considerable disruptions within the general insurance market, most notably in pricing structures. According to the latest data from Consumer Intelligence, on the day of the incident, prices surged for 17 home insurance brands. Particularly alarming was the four brands which recorded average increases ranging from 32% to a 65% for annual premiums. In one extreme instance, the annual premium for a policy rose by £439. The disappearance of some key underwriters from the market was a significant factor contributing to these sharp price increases.
By the following day, prices for home insurance began to show signs of stabilisation, although Consumer Intelligence notes that further analysis is required to understand the full scope and duration of the impact. The ability to obtain quotes, which initially suffered a downturn, began to recover by the end of the weekend.
The motor insurance sector wasn't spared from the upheaval. It saw similar disruptions, with 25 brands recording price increases on the same day. These increases were largely attributed to the need for manual registration searches after automated systems failed, alongside fluctuations in underwriter availability which temporarily reduced the availability of quotations. Nonetheless, these issues were largely resolved by the end of the next day.
Ongoing issues persist in customer service functions across several insurance providers, with reports of disrupted operations at contact centres and reduced availability of live chat services. This has led to potential frustrations among customers seeking support and information.
Ian Hughes, chief executive of Consumer Intelligence, stressed the importance of their monitoring efforts, stating, "We continue to observe the repercussions of the IT disruption to build a comprehensive understanding of its impact on the general insurance industry. Notable issues included failures in automatic registration lookups and significant fluctuations in pricing and quotability across numerous brands."
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