Low-cost motor rates not sustainable, says Onlyinsurance
Following recent insurance industry forecasts of a 10% increase in motor premiums* for 2008, Onlyinsurance.com, a subsidiary of the City-based Only Group, believes that this rise will give a truer representation of motor insurance costs.
The predicted motor premiums increase - attributed to increased premiums within the wider insurance market and a high volume of weather-related claims in the coming months - is set to trigger increased competition in the aggregation and broker market.
Motor insurance premiums have long been lagging behind other personal insurance lines such as home or travel insurance and the industry consensus is that low-cost motor insurance rates are not sustainable in the long run.
Ian Hall, head of personal lines at Onlyinsurance.com said: “An accurate representation of motor premiums is not only vital to our consumers who will get a fairer insurance deal but also to our business partners, who expect first-rate product offerings.
“With swelling premium costs many brokers and aggregators will no longer be able to offer low cost products which often involve poor deals with high excesses and limited cover,” he added.
Motor insurance currently accounts for two-thirds of all insurance sales at Onlyinsurance.com which has a panel of over 25 motor insurers, brokers and direct writers including specialists such as Kwik-Fit, NIG, and Swiftcover.
“Our partners agree that the prices need to increase in order to propose motor insurance covers that are reasonable deals for the consumer with no hidden excess costs and restricted arrangements,” said Hall.
“In the past we’ve proved to our consumers and partners that cover and costs can be compatible by employing an advanced quote to conversion system. We consider any motor premium rise as an opportunity to develop our consumer offering,” he concluded.
* Source: Analysis by EMB, August 2007