Things appear to be looking up for motor insurance Last year was encouraging, showing an improvement in performance for the sixth year running and the best figures for 10 years.
But this is a complete deception (page 20). Insurers have used over-reserving to improve their results. Look further, and the reality is that the motor insurance market is caught in a downward spiral (page 13) with little sign of recovery.
The motor market has not made any underwriting profit since 1994. It remains to be seen whether insurers will grab the bull by the horns and start putting premiums up, or if they will bend once again to the 'price war' and put volume before profit.
With claims inflation estimated to be running at between 3.5% and 5% per year it is expected the motor market will this year be 7% worse than in 2004. Not good news at all.
And motor fraud is prevalent, with fraudsters quickly adopting new methods (page 6). The issue of using voice detector systems to identify those making fraudulent claims has proved controversial, and whether seasoned fraudsters can lie their way through the system is an interesting point.
But there is no doubt that the ABI's motor committee, headed by Barry Smith, is not taking any issue lightly (page 10). In fact, the ABI's agenda on motor issues is getting longer and longer ensuring that all areas are covered.
And the effective use of outsourcing in motor claims is proving highly cost effective and ensures that policyholders can deal with an expert at every stage (page 25).
It is not all bad news.
