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UK Car Insurance Industry Watch, July 2007 |
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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. NU
Plays Down Research Linking Whiplash Injuries with Premiums Motor research organisation Thatcham recently claimed that its study, which found that whiplash was significantly less likely to occur at speeds less than 10mph, would help insurers fend off fraudulent claims, by providing court admissible data to challenge claims. It also suggested that safety-related variations in seat and car type could provide a framework for insurers to rethink premiums. NU, however, was reluctant to suggest Thatcham's research would provide conclusive evidence in the courtroom. Richard Ellis, NU head of motor claims, said: "Although in theory it might be difficult to obtain whiplash, particularly at low speeds, there are extenuating circumstances, such as the facing direction of the driver's head at the time of the collision, that make it difficult to prove that whiplash was not caused." Only around 10% of motor claims involved bodily injury, of which 85% of those include whiplash. Ellis also played down the potential impact of the research on setting premiums. ENDS Department
for Transport National Statistics ENDS Car
Insurance Costs Reach All-Time High Fully comprehensive premiums have risen by almost 8 percent in the past 12 months, despite a slight dip in the first quarter of 2007, according to AA's benchmark British insurance premium index. They went up 2.5 percent in the second quarter of this year to an average 822 pounds - more than twice that in July 1994, when the AA index was first published. Third party, fire and theft car insurance is also on the up. It increased by 1.32 percent in the past quarter to its highest-ever index average of over £1,000 pounds. This kind of cover is typically bought by young, inexperienced drivers with little no-claims bonus and premiums reflect this. Kevin Sinclair, managing director of AA Insurance, said: "There is still a large gap between premium income and the cost of claims so I'm not surprised to see the generally upward trend of the previous year resuming. I think this trend is likely to continue," he added. Source: Reuters, July 2007. ENDS Driving
and Dementia
Source: British Medical Journal. ENDS Safety
System Warns Drivers of Dangers They Can't See It sounds the alarm if two vehicles are on collision course, allowing the driver to take evasive action. General Motors (GM), which developed the system, yesterday showed Transport Department officials how it worked. The V2V - 'vehicle to vehicle' - technology uses satellite navigation data to plot the precise location of a car. That information is relayed by a wireless network to other cars within range, triggering a warning if those vehicles get too close for comfort. GM claim the software employed is secure against computer hackers to prevent any attempt to cause mayhem on the roads. ENDS Highway
Acquires over 30,000 Motor Insurance Policies At the same time, Hero has appointed ACM ULR, also part of the Budget Group, to provide its motor legal protection services. ENDS
Free Car Insurance Coming to the UK? In Australia DaimlerChrysler (NYSE: DCX) is now offering two years' free car insurance to prospective buyers of its new Dodge Nitro SUV. The value of this incentive has been calculated to be up to roughly 10% of the value of the vehicle. With many manufacturers struggling to achieve sales target across all models and markets, there is an increasing drive to rejuvenate sales on the forecourt. Indeed Volkswagen have already offered free motor cover in the USA, to try and light a fire under slowing sales. So perhaps we could expect a flurry of new 'free car insurance' promotions in the UK?! ENDS Admiral
Pulls Plug on Confused.com Sale Admiral chief executive and cofounder Henry Engelhardt is understood to have baulked at investor demands for seats on the board and plans to saddle the company with an excessive debt burden. The company said potential buyers set out conditions that were 'significantly more onerous than the board had anticipated' and would 'restrict the ability to maximise Confused's potential as part of the Admiral Group in the medium to long term'. Admiral declined to reveal the identities of the potential buyers involved. Competition in the price comparison website market is getting fierce, with both Tesco and Royal Bank of Scotland tipped to launch their own services soon. Industry analysts expect a flurry of merger and acquisition activity in the internet price comparison sector over the coming months. ENDS Thatcham
in New Alert - Crash Repair Experts to Identify New Vehicles This provides advance details of materials, joining technologies and design features that must be addressed during the repair process. In their continuing aim to drive safe and quality body repairs, crash repair experts Thatcham have listened to their customers who are urgently requesting assistance with new models which increasingly contain model specific repair challenges. Jason Moseley, chief operating officer at Thatcham, said: “Thatcham’s position within the automotive sector allows us to track and identify new vehicle design trends at an early stage. The inclusion of Technical Profiles in escribe enables us to share that vital advance information with repairers and engineers." ENDS Biba
challenges Transport Select Committee report In response to the Committee’s report on ‘Novice Drivers’, Graeme Trudgill, BIBA technical services manager, commented: ”Biba believes it is only fair that the higher cost of claims caused by young drivers is reflected in their premiums. Claim-free drivers should not be penalised because of reckless youngsters. BIBA believes in a fair system of risk-based pricing. “Suggestions from the Transport Committee today that the insurance industry should consider reducing premiums for novice drivers would only lead to an increase in premiums for claim-free drivers.” Eric Galbraith, Biba chief executive, added: “Insurance can seem expensive for young drivers, especially if they are going online to find the best deal. Using a broker will ensure that you have the insurance product to suit your needs and can help you find the best deal. “Brokers deal with many different insurers offering choice, specialist young driver policies, short period policies and flexible instalment facilities. On top of that, they will give free advice about excesses, significant features and exclusions.” Biba has called on the Government to ensure:
ENDS Caravan
Insurance Research Unlike motor insurance, caravan insurance isn't compulsory. However, neglecting to insure may prove to be a false economy. One in ten caravanners have made a claim in the last three years and of those three quarters have claimed for accidental damage and 13% have claimed for either theft of, or from, the caravan. Towergate's research showed that the main reason given for not taking out insurance was the (low) value of the caravan (45%) followed by the fact that the caravan isn't used very often (27%). While caravanners may believe they can cover the cost of a theft or a bit of damage to their own caravan, an accident may leave them liable for a great deal more if they cause damage to a third party vehicle or property. Dave Sheath, managing director of caravan insurance specialist, Towergate Bakers says: "We were alarmed to see from our research how many people were not taking out insurance. "Not only can some of the top of the range caravans set you back well over £20,000 if they are stolen, the damage you can cause to third parties can be enormous." Caravan insurance starts from around £100 and with a good insurance policy you'll be covered for the value of replacing stolen goods, cost of repairs and for substantial third party liability. ENDS Minister
intervenes over car data chaos - 400,000 policies were not reported by
Direct Line to motor insurance database Transport minister Rosie Winterton called the meeting following a complaint from Labour MP David Jones that a woman in his constituency had her car wrongly confiscated by North Wales police. Helen Parry, of Llandudno, was stopped by police when driving her father’s car and told it was not insured. She was left standing in the rain until her mother arrived and paid £105 to free the car. The police later apologised and blamed Direct Line for the error. In a debate at the Houses of Parliament, Jones said Direct Line had failed to report 400,000 policies to the Motor Insurers’ Bureau (MIB), which manages the database. Jones said: “It seems the information provided by Direct Line to the database was erroneous. I have since discovered that the details of around 400,000 motorists insured by that company had not been provided to the database within the required time frame.” The MIB urges police to use the database if a driver contests the uninsured allegation and insists insurers notify the MID of 95% of all changes to motor insurance within 14 days. From January this will be cut to seven days. It said insurers achieve 97.5% within 14 days and 80% within 48 hours. The organisation claims that as many as 100,000 uninsured vehicles have been taken off the road as a result. Winterton said insurers that persistently provide wrong or late data would suffer bad publicity. The ABI said it would “apply pressure” to any member not providing fast and accurate information to the database. The MIB said: “Accidental seizures of cars is very rare.” Direct Line did not deny the MP’s figures. It said: “Due to a recent systems error, a number of Direct Line policies were not uploaded on to the MID. This was a temporary error and any policies that were affected have now been rectified.” ENDS Drivers
warned to check for flood cover "Third party or third party, fire and theft policies are low cost and straightforward contracts, but they do what they say on the tin." "Drivers with these policies will not be covered for flood damage. Only those with a comprehensive motor insurance policy will be able to claim for flood damage on their car insurance." ENDS |
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