It is right for the insurance market to be concerned about Quinn-direct's entry into the UK motor market (Insurance Times, 14 October).

The latest AA premium index shows that motor rates are continuing to soften - by almost 1% in the third quarter. And I would not be surprised to see that trend accelerating in the final quarter and into the new year, as Quinn marches on.

Given that claims inflation is running at 4% or 5% in the motor market, this continued softening is of a great concern for the market as a whole.

Quinn seems to have developed a model, based around quick settlement of claims, that manages to produce profitable underwriting despite its aggressive pricing strategies. But what of other insurers? Can their profits withstand a price war? One fears not.

The coming months look set to see quite a scrap in the motor market, as the big boys tough it out with newcomer Quinn.

Ben Davies

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