UK insurers set for another tough year
UK motor insurers are in for another tough year, according to Deloitte.
If found that the sector made an underwriting loss in 2015, and predicted that loss to deepen this year as higher insurance taxes encourage drivers to shop around for the cheapest deals.
‘Large rate increases and changes to insurance premium tax have meant many consumers’ pockets have suffered,’ said James Rakow, insurance partner at Deloitte. ‘Insurers will need to work harder to tailor products and premiums to individual needs.’
The net combined ratio for the sector was 102% in 2015, Deloitte said, meaning £102 was spent on claims and expenses for every £100 of premium received. Deloitte forecast the net combined ratio could rise to 104% this year, dropping back to 102% in 2017.
The value of insurance premiums rose five per cent last year to a total of £13.7bn, according to Deloitte survey, but James said that motor insurers have relied on tapping into reserves, investment returns or add-on services such as legal assistance to boost profits.