Biba calls for telematics IPT exemption
The British Insurance Brokers’ Association (Biba) believes that telematics products should be exempt from Insurance Premium Tax (IPT).
Premiums rose by 11% in the second quarter of 2016, according to the latest Insurance Price Index from the Biba and Acturis.
Graeme Trudgill, executive director at Biba, told Insurance Age, ‘Biba member research shows that there is a 40% drop in crash risk for new drivers that use a telematics device so any incentive to use these policies will be a great boon for road safety.
‘Removing IPT would increase this motivation, improve road safety and yet still have a net financial benefit to the economy over time so we will certainly be encouraging Treasury to consider this move.’
The index found that motorists are paying 15% more for the same cover and the highest since the index began monitoring premiums in 2010 as a result of IPT. It also found the tax had increased by 66.7% in the same period.
Young drivers were most impacted, with average premiums already £1,300 and likely to increase by another £200.
Theo Duchen, chief executive of Acturis said, ‘The increase in IPT that is now applying simply accentuates the premium hike for all motorists and especially those already facing high premiums.’