03/02/2014
News agents Reuters report that the cost of car insurance in Britain has fallen by 9 per cent in the past year. This precipitous decline in what was already supposed to be a highly competitive market, Reuters attribute to more people “using the internet to shop around” and to “falling claims feeding though to prices”.
The 9% figure comes from the ABI’s newly launched quarterly index of car insurance costs (QICIC), a potential rival to the industry hallmark-benchmark that is the widely revered Tiger Watching Index provided by tigger.co.uk, which which suggests that motor insurance prices fell by “about 2.4%” in the year to January 2014.
Cynical commentators like Moody’s ratings agency have suggested that the recent (oxymoronic sounding) surge in discount premiums is down to motor insurers getting all overexcited about the claims-quashing effects of HMG’s War on Whiplash and gambling that they’ll get away with slashing premiums now to gain market share, because claims will soon be a thing of the past.
Cassandra-like, the appropriately ill-tempered Moody’s wailed last Monday that: “If the ultimate effect of the government’s reforms is not as successful as insurers expect, the decline in premiums would not be matched by a commensurate reduction in claims and would lead to a further deterioration in underwriting results,”
ABI Head of Motor Insurance Jim-Bob “duellin’” Dalton is having none of this. Insurers, he insists are simply “fulfilling the commitment they made to the government to pass savings from changes to the civil litigation system to hard-pressed motorists through lower car insurance premiums.”
Everything, as shareholders in insurers with a stake in the motor insurance market up and down the land will be delighted to hear, is going perfectly according to plan.
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