Brokers call on insurers to halt rate cutting
Motorcycle insurance brokers are calling on insurers to halt a rapidly escalating price war sparked off by AXA's entry to the market.
A number of insurers, including Equity Red Star, have reacted to AXA's aggressive pricing by dropping rates across a number of risks in the motorcycle sector.
A motorcycle broker said: "Equity has already introduced one price cut in the last two months and has recently announced it will be putting through another on its Equity 2000 product."
Equity Red Star is understood to be targeting three to four-year-old bikes with its latest price reduction. The estimated 3% reduction is to be introduced next month.
The move led brokers to call on insurers in the motorcycle sector to maintain discipline in what has historically been a very stable market.
A broker said: "We are seeing price reductions come through on an almost daily basis. But what we don't want is to see the motorcycle market following private motor into the soft cycle.
"Underwriters need to hold rates at a reasonable level for both the insurer and broker markets."
It is understood that AXA is considering a price hike next month that would bring its rates into line with the rest of the market.
Both AXA and Equity Red Star declined to comment.