Deloitte: Motor insurance premiums to rise by up to 10%
22/10/2008 - 10:00:51Nearly 90% of Irish motor insurance companies said that they expect to increase premiums in 2009.
According to Deloitte’s annual motor insurance survey, 41% expected an increase of up to 5%, with 42% expecting increases of between 5% and 10%.
Analysis of the insurance statistical review and returns made to the Financial Regulator show that overall motor insurance companies showed a rise in profits.
However, much of this has arisen from continued release of reserves from prior years, increasing profits in the current accounting period.
The current year’s business is not showing the profitability of previous years, leading to the expectation that premium rates will need to rise.
Dick Tulloch, Director, Actuarial Services, Deloitte, said: “Motor insurance companies are facing a push/pull situation – on one hand, as competition in the market remains intense, companies are coming under pressure to reduce costs. On the other, reduced margins in current premiums are creating pressure to increase premium rates. What’s clear is that motor insurance companies will need to be extremely careful when deciding upon their pricing strategy as a loss of market share is the very probable result of getting it wrong.”
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