Market needs to 'keep up momentum' says EMB analyst
Motor insurers suffered a significant deterioration in their performance during 2009 despite still significant reserve releases, latest analysis from consultants EMB shows.
Operating ratios as a percentage of premium exceeded 119%, compared with 105.5% last year, EMB revealed, using FSA returns and recent industry data.
Private motor recorded 122%, and commercial fared only slightly better at 110%.
Although still substantially down on previous years, releases accounted for 2.4% of net premium.
Meanwhile, the continuing trend of rising bodily injury claims continues to haunt the industry as claims expenses rose from 5.5% to 5.9% of net earned premium.
In a spot of bright news for the motor market, earned premium income was up 2% in 2009, even before the full effect of price increases implemented later in the year appeared in the results.
Consultant Naeem Ali said: “Many motor insurers have gone to the edge – some alas have gone over it by choice or otherwise.
“Having taken the first steps in the other direction, the rest of the market needs to keep digging in its heels to keep up the momentum.”