Household premiums up
Increasing labour costs and extreme weather conditions will force household premiums up, according to Royal & SunAlliance(R&SA).
R&SA household underwriting manager Alan Gairns said that the shortage of builders had increased labour costs, which had a "knock-on" effect for insurers. Adverse weather conditions were also driving premiums up, he said.
Elite Incident Management head of network operations Clive Rolfe said the shortage was because builders had not been able to make capital investments.
Flood insurance provided
The ABI announced that at the end of September its members would continue to provide flood insurance to the vast majority of homes and small businesses in areas at risk of flooding.
It unveiled a new Statement of Principles (see page 8) setting out a basic approach for member companies providing flood insurance.
Following the announcement, Churchill and Norwich Union said they would continue to cover policyholders living in flood-prone areas, when the industry's deal with the government expires.
AA predicts price war
The AA has predicted that insurers could face a vicious price war in the home insurance market.
Its British insurance premiums index survey found that the market had stabilised and that this was now attracting new entrants.
The survey said the new arrivals were using price promises and loss leaders to obtain customers.
AA Insurance Services managing director Andrew Briscoe said that "it could threaten the long-term stability of the industry".
Asbestos risk service
Zurich Risk Services launched an asbestos management service with the world's biggest environmental risk management company, National Britannia Group. The service is designed to help companies cope with the new Control of Asbestos at Work Regulations. The regulations, due to come into force in October, will require employers and property owners to demonstrate that they have asbestos risk management plans in place.
Weather claims
British Weather Services launched the first pictorial weather service for validating claims. The system enables insurers and loss adjusters to predict the weather conditions for a particular time and place simply by typing in the date and postcode.
Flood defence database
The Environment Agency is to add a flood defence database to its website in the autumn. The information will be used in the What's in Your Backyard section of the website which currently shows flood plain maps.
Highest fire claims
ABI figures show that fire claims are at their highest since records began.
The UK domestic insurance industry, excluding Lloyd's, paid out fire claims worth £309m in the first quarter of 2002.
This was an increase of 37% on the same period last year.
Household premium hikes
UK household insurance premiums may rise if reinsurance rates are hiked up following the flood damage in central Europe.
A spokesman for Munich Re confirmed that premiums would rise if damage increased.
AXA said it would have to raise premiums if reinsurers changed their criteria.
At the end of August, the estimated insurance bill stood at £10bn. But the final cost could be much higher.
Loss adjuster GAB Robins' London market director James Peace said: "It is likely that as the flood levels subside, we will be notified of more claims from insurers and reinsurers and will have a better understanding of the extent of the damage."
