Insurers must increase their rates online by 20% compared to their broker rates

Swinton chairman Patrick Smith warned insurers that they desperately needed to increase rates.

“Our market has a long history of bloodbaths followed by significant increases in rates. Here we are again, at the buffers, still driving hard.”

He said online rates should be pushed up immediately to avoid a “catastrophe waiting to happen”.

“If this market is to become sane insurers have got to increase their rates online by at least 20% compared with their broker rates.”

Speaking about the consolidators, Smith said the business model would face a severe test of its durability in the next few years.

He said consolidators had driven up prices to an unsustainable level and would need to readjust their prices.

“It makes a lot of sense to maximise your brokerage, but what you cannot do is build a long-term strategy around it,” Smith said.