UK motor [auto] insurance premiums “have continued to rise in 2011, with some drivers facing price increases of up to 50 percent,” according to findings of the annual UK Motor Market Review by Willis Re. It also noted a significant “fall in the number of deaths and serious injuries on British roads,” which has “resulted in a 10 percent year-on-year reduction in the frequency of large claims (measured against premium income).”
The fourth annual review surveyed over 50 percent of the UK motor insurance market, and examined patterns in large motor claims.
Richard Bloss, Executive Director, Willis Re, noted that the motor market is in a state of flux, both on the insurance and reinsurance side. “We’ve seen significant increases in what people are paying for their car insurance, and a gradual but clearly discernible pattern of reducing numbers of deaths and serious injuries on the UK roads,” he explained.
“At the same time, those serious claims that are still happening are tending to cost on average nine percent more than last year, and many are being settled as continuous regular payments for the remainder of the claimant’s life, which dramatically increases the time horizon,” he added.
Other key trends highlighted by the survey include the following:
• The tendency for large bodily injury claim values to escalate faster than inflation has been recognized for some time. The report shows, however, that the rate of escalation has remained relatively constant over time – a good point for motor insurers to be able to demonstrate in motor treaty negotiations.
• Insurers are generally becoming more accurate in their reserving of claims. As earlier reserving becomes the norm, we are seeing general claims valuation reaching maturity much more quickly than in the past. The study shows that claims reserves are six percent closer to maturity by the end of the second year than they were in 2010.
• Increases in original premiums and falling accident numbers have meant that the number of large claims (up to a value of £5 million [$7.87 million]), measured against premium, have reduced by 10 percent.
• Male policyholders are twice as likely as female policyholders to have a large claim.
Source: Willis Re
Topics Trends Auto Claims Pricing Trends Willis Towers Watson
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