Rates rose 15% in personal lines motor in the first half of 2010
Zurich is expecting revenues to fall further in its UK general insurance book as it continues to push through rate increases in personal lines motor to combat rising bodily injury claims.
The company increased rates 15% in personal lines motor in the first half of the year, following its pledge in January to increase rates in the broker segment of this business by 20% in March. Increases across the entire personal lines segment were 13%.
Gross written premium and policy fees fell 3% to $1.45bn (£90m) in the first half of 2010 from $1.5bn in the same period last year. A Zurich spokesman attributed this to falling retentions and new business in the UK motor book, saying: “We will continue to push through corrective actions, including rate increase and we expect retention levels to go down significantly.”
Despite the rate hikes, the company continued to suffer the effects of rising bodily injury claims. The UK general insurance division’s combined ratio for the first half of 2010 increased to 99.7% from 95.2% in the same period last year on the back of a 3.3 point increase in the loss ratio to 73.1%.