Car insurance premiums are set to rise, insurer Admiral warned as it unveiled record profits yesterday.
The company, which owns insurance brands Diamond, Elephant and Confused.com, predicted premiums will rise a few percentage points over the next few months.
Admiral reported a 16 per cent rise in profit before tax to £100.3 million for the first half of 2008, while turnover rose 13 per cent to £472.5 million.
David Stevens, chief operating officer, said: “Rises in market premiums and a relatively benign claims experience over the last 18 months mean that, for the first time in seven years, we see a real prospect of falling underlying loss ratios in our core UK business.”
The motor insurance industry is highly competitive and premiums have remained virtually flat over the last few years, despite a rise in the cost of claims.
But insurers have been saying that this is unsustainable, and are starting to raise their premiums.
“Consumers can expect to see premiums rise slightly on top of the two to three per cent increase seen in recent months,” Mr Stevens said.
Admiral also said the rise in petrol prices was helping insurers, as people are using their cars less and therefore there are fewer claims.
4 Comments
If people are using cars less and fewer claims should’nt the insurance go down not up?
more greedy companies profiting in our time of need
There’s always a deal to be had somewhere else so move insurance companies if they put the price up - loyality works both ways.
Re Y Mabs comment No1 - well thats what I thought! I think we need Huw Peach to shower us with some statistics to make sense of this one.
Insurance premium levels are calculated on something called ‘historical data’. If people use their cars less, and claims fall, then premiums will also drop but this will be in the future, not now. The insurance companies don’t work on forecasts.
Hopefully the price of fuel will continue to rise. Perhaps when it goes past £5/litre we will start to see a real reduction of cars on the roads as those just driving around for the sake of something to do choose a cheaper hobby.