Autonet Insurance

Autonet Insurance

May 05, 2011 01:00 ET

Insurance Rates Up 30%

BURSLEM, UNITED KINGDOM--(Marketwire - May 5, 2011) - At a time when people are feeling financially vulnerable motorists across the UK have had to tighten their wallets as they are hit with massive increases in the cost of their motor insurance.

In recent months, motor insurance premiums have gone up at a record high, reaching a wallet-busting average of more than 30% during 2010 which begs the question:

Are insurance companies just lining their pockets with even more of consumers' pennies?

Autonet Insurance, one of the industry's most highly regarded and respected insurance brokers takes a look at the recent spike in insurance rates across the UK.

Official statistics from Mintel suggest the rising cost and incidence of personal injury claims are widely seen as a major cause of increased insurance premiums, while insurance fraud and inflation are also having an impact. Rising claims costs which have contributed to 15 years of underwriting losses, culminating in a record loss of £1.5 billion in 2009 while recent estimates have put the cost of fraudulent insurance claims to add an extra £80 onto the average car insurance policy as well as adding £44 to every household's insurance cost. It is also estimated that uninsured drivers represent around one in 20 vehicles on Britain's roads, and claims involving such drivers added around £30 to every annual motor policy. Based on these statistics, higher insurance premiums will continue to be a feature of the market in 2011 as insurers continue to tackle high claims costs – driven by high-cost personal injury claims and increased levels of insurance fraud.

Glynn Keeling Managing Director of Autonet Insurance commented: "2011 will be another challenging year for the motor insurance industry. Higher premiums are an obvious catalyst for people to look around for a cheaper deal, but with premium rate rises across the market it has become increasingly difficult for consumers to make significant savings by changing insurers. As a business, reducing these costs remains a challenge and a priority for us. We are constantly in talks with our own insurer relations to encourage discounted rates despite the rate increase for all the policies across the industry."

A Mintel survey conducted this year suggests that after strong premium growth in 2011, there are already indications that premium inflation is likely to slow in 2011. However, as insurers continue to work towards underwriting profitability, premiums are still expected to continue to rise for many policyholders during the next 12 months.

Craig Ball Finance Director added: "We are consistently watching and monitoring the insurance market very closely. Looking forward to 2012 and beyond, premium growth is likely to slow noticeably as competitive pressures begin to result in a softening of insurance rates and premiums. Insurers who have lost volume due to premium hikes are likely to once again switch their strategy to gaining volume through aggressive pricing strategies."

Are motorists doing all that they can?

It was also interesting to see from the official Mintel motor insurance report conducted that only three in ten motor insurance policyholders switched to a different provider at their last renewal and around a quarter stayed with their existing insurer without the hassle of searching for a better deal.

As a broker, we search for the best possible insurer for consumers needs which helps reduce the cost to consumers. With this in mind, it's increasingly important for drivers to shop around when their policies are up for renewal in order to make sure they get the best motor insurance quote for their money.

Contact Information