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UK Car Insurance Industry Watch, April 2008 |
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This regularly updated section of the HomeApproved web site will cover the latest trends, research, opinion and developments in the UK car insurance sector. Insurance
premiums stall, AA Index finds After a year of increases that have added nearly 6% to the average annual premium quoted for comprehensive car insurance, the Index recorded a slight fall. It now stands at £682, just £3 less than at the end of 2007 but £37 more than this time last year. Andrew Strong, CEO of AA Insurance, said: "A recent Datamonitor report suggested that the car insurance industry could become profitable by the end of 2009 – but we calculate that an annual premium increase of 20 per cent would be needed to achieve that. The latest AA Index shows that this is a far from realistic expectation. Car insurance premiums levelled off during the first quarter – reflecting the pattern of 2007 although the trend is upward." "March is a peak period for car insurance sales with many companies holding rates to gain market share," said Mr Strong. "But insurers continue to be squeezed between increasing costs such as legal expenses and personal injury claims, and competitive pressure. For every £100 taken in premiums, the industry shells out £112 in claims." "If premiums don’t continue to rise at a realistic rate, there will be a point when large premium increases become inevitable. That would unhelpful for customers and will damage the reputation of the industry."
ENDS Hunt
calls on ombudsman to name and shame Hunt’s six-month independent review into the service and its relationship with the financial services industry, consumers and other stakeholders called on the FOS to create a league table of financial services firms, and ‘wooden spoon’ awards for those facing the highest number of complaints. Complaints from the general public are referred to the ombudsman when the firms in question oppose them. Hunt said: "We’d like to see best practice highlighted so that everyone can benchmark themselves against the FOS criteria for being fair and reasonable in all circumstances towards customers, clients and the consumer. That would be an incentive to those who are not performing well to raise their game." Hunt added that the general insurance industry has a good record with the FOS compared with other sectors. He said: "Main areas of complaint concern the banking community and product providers, not intermediaries. We say each of the sectors should have an opportunity to prove they’re the best in the business." Meanwhile the ABI welcomed the review’s stance that the FOS should be more transparent. But an ABI spokesman said: "Lord Hunt is right to say that proposals on publication of data will be controversial. We agree that there should be a proper dialogue between all interested parties, before a decision is taken on the publication of firm-specific data." ENDS Five
brands join GoCompare's car insurance comparison service Hayley Parsons, chief executive, Gocompare.com, said: "We are delighted to welcome the Churchill, Lloyds TSB, Privilege, Tesco, Tesco Value and Virgin products to the Gocompare.com website. Our aim has always been to offer the customer the widest possible coverage across the car insurance market and with the addition of these brands, we are now providing one of the most comprehensive online car insurance comparison services in the UK." "Customers get a better deal when they can compare a wider selection of the market, interrogate the results thoroughly and see exactly what they are getting for their money. By focusing on giving consumers guaranteed quotes they can trust, and product information that they can use to filter and sort results, rather than just listing prices." ENDS Confused.com
signs a deal with RBSI The deal, which excludes Direct Line, will see brands such as Churchill, Privilege, Devitt as well as Tesco Insurance products featured on an aggregator site other than Tescocompare.com for the first time. Commenting on the deal, Debra Williams, managing director of Confused, said: "We welcome these brands onto our panel. We have always kept the channels of communication open with RBSI and we have been working on this for some time. Confused.com is committed to providing a first-class service and the advent of this deal enables us to provide customers with access to nearly the entire insurance market – something we’ve been striving for since day one." She added: "Price comparison web sites offer one of the cheapest acquisition costs of any media and allow all insurers, regardless of size, to compete on a like-for-like basis; as more customers increasingly turn to the internet to buy insurance, they have become a channel the insurance industry can no longer afford to ignore. "Competition in the price comparison sector is rife; these latest additions to our panel further strengthen our leadership position by widening the gap between us and our nearest competitor, and confirming us as the most comprehensive place on the internet to search for insurance." Chris Sullivan, chief executive at RBSI, said that it would be hypocritical of the insurer to join any other aggregator as it had consistently highlighted the perceived shortcomings of choosing on price. "We deliberately took a stance with RBSI that we did not want to go on aggregators during the early stages for valid reasons. I think the Tesco business is worth supporting and it will be an interesting time for us to see what happens," he was reported saying. Motor products will be live on Confused within the next few weeks. ENDS Government
backs down on vehicle recovery fees The Home Office published its final proposals for the charges this week, after Insurance Times revealed that 25 top motor insurers were willing to go to court to stop it introducing the huge new charges initially proposed. Government lawyers have started drafting the new legislation, which will come into effect on 1 October. Michael Eagles, joint chairman of the Insurance Forum, which represents the 25 motor insurers, said: “It’s a vast improvement, and something the Insurance Forum is going to be much happier with. I think the Home Office has taken up a lot of what we have said in terms of the definitions, and it can be applauded for that.” The ABI also lobbied for lower charges, with director general Stephen Haddrill writing to the Home Office. Under the original range of proposals, recovery companies could have been charged £8,400 for removing a fully laden HGV over 18 tonnes that had broken down off the road, and had one or more wheels off the ground. Under the new laws, the company can charge only £6,000, and the HGV would have to be on its side or substantially damaged. The scheme will be reviewed regularly. See Also: Car Insurance News, March 2008 ENDS Groupama
acquires ChoiceQuote ChoiceQuote controls premiums in the region of £25 million and focuses on niche and non-standard motor covers, with specialisms in the taxi and motor trade sectors. The insurer bought specialist motor broker Carole Nash in December 2006. In a statement Groupama said that ChoiceQuote would retain its brand, senior management team and would continue to operate independently of Groupama’s other UK broking investments. Chief executive of Groupama UK, François-Xavier Boisseau, said: "This is a strategic investment that gives us access to a number of valuable niche areas where we do not currently participate and also boosts our exposure to on-line trading - an area of particular strength for ChoiceQuote and something that we believe is important in securing access to market." ChoiceQuote chief executive Phillip Catterall said: "I am delighted to have reached this agreement with Groupama UK. With their other broking investments in the UK they have demonstrated that they are very supportive shareholders with a very clear vision. These are exciting times for ChoiceQuote and I see a very bright future for the company under Groupama ownership." ENDS |
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