Insurers cannot be allowed to shift the blame again for 14% increase in motor premiums26 April 2016
Insurers must explain why premiums are rising when profits are so high
Car insurance premiums have risen by 14% over the last year, and the insurance industry must explain why without laying the blame on everyone and everything else but their own drive to increase profit, says campaigning law firm Thompsons Solicitors.
The latest car insurance price index from Confused has indicated that comprehensive car insurance policies have increased to an average premium of £671, up £81 on this time last year.
According to the Association of British Insurers (ABI), the government’s increase to insurance premiums taxes in the last 12 months have added £15 (in total) to the average motor insurance policy holder between November 2015 and March 2016 which leaves £66 of the increase unaccounted for.
- 52% of the car insurance market is made up of just five major players
- Direct Line increased its UK motor insurance operating profit by 14% to £338m (2014: £297m); Admiral increased its UK motor insurance profit before tax by 11% to £443m (2014: £398m)
- From 2010 to 2014, insurers have made an aggregate saving on claims costs of £6.68 billion
Thompsons Solicitors, who has been tracking the car insurance industry since 2013 is today (26 April 2016) calling on insurers to justify their ‘blatant profiteering’ at policy holders’ expense.
Tom Jones, head of policy at Thompsons Solicitors said: “This is a compulsory purchase for every driver in the UK. The profits of the main players must be keeping their shareholders very happy whilst consumers are being ripped off. We are calling on insurers to openly and transparently account for why they have opted yet again to increase motor insurance premiums at a time when their profits and dividend pay-outs have never been so good.
“The insurers should spare us from rehashing alleged ‘fraud’ as an excuse. The Financial Reporting Council requires companies to declare any ‘material risk’ to the market, but no insurer made any reference to fraud when they reported their most recent financial results to the markets only a few weeks ago - so that can’t be used to justify this extraordinary increase.
“This smacks of blatant profiteering. Insurance profit figures increase dramatically year on year and the consumer just has to swallow the cost because there is nowhere else they can go.
“The idea that this lot will pass on savings gifted to them by the government if they increase the small claims limit in motor accidents is laughable. All the evidence is that the relentless march for profit will go on save for possibly a small sweetening of the bitter pill that those injured through no fault of their own will have to swallow - of either having no independent legal advice or having to pay for it from money intended by the courts to be for their injuries and losses.”
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