Insurer defends new ratings as it overhauls personal lines products

Royal & SunAlliance is to withdraw higher risk motor cover from most of its brokers as part of a comprehensive overhaul of personal lines products.

The insurer introduced Drive Select across its agency base this month, restricting cover to the 25-plus age group, with three years' no claims discount and comprehensive-only cover. The excess payable on claims will also increase from £100 to £200.

R&SA's existing product, Drive, will be withdrawn from standard agencies later this year. It will, however, continue to be available to R&SA's partner brokers.

R&SA personal lines business director Duncan Finch said: "We are introducing more sophisticated rating. For people who are eligible we should be able to offer a better price."

But the change has led to accusations that R&SA is pushing premiums down. One rival insurer accused the company of cutting up to 10% off comprehensive prices over the last three months.

Finch replied: "We are not cutting our prices to write for volume, but it is possible that as we change our rating price alterations will come through."

R&SA is also introducing a new factor-rated household product later this summer to replace the sum insured scheme it currently operates. This will be followed by the restructure of its high and mid-net worth products, which will focus on improved service through a dedicated team in Oldham.

Finch did not rule out using the new products to increase the insurer's agency base. He said: "We will go back out into the market where we think there is an opportunity to grow our business."