Row erupts over fleet price cuts

A row has broken out between major fleet insurers over price cutting.

Norwich Union (NU) has accused its competitors of driving down motor fleet rates. NU intermediary business director Ken Wallace said unsustainable pricing had reappeared in the fleet market and he feared other classes of commercial insurance would follow suit.

"I think most, but not all, of the major insurers are trying to keep a stable market going forward. Our philosophy on fleets is to make sure we keep what we've got and get an inflationary increase, but we are seeing signs that others are trying to renew at last year's terms or below and I just don't think the market can sustain that long term," he said.

"The difficulty and danger is if somebody comes in and starts to undermine the market. I don't think the market will be pleased for any company to do that at the moment."

But some brokers accused NU of being among the worst price cutters. "There is a lot of downward pressure in the motor fleet market at the moment and NU does not have clean hands," one broker said.

Wallace denied the accusations: "NU is not chasing market share for fleets. We will not write business at a loss."

Allianz Cornhill commercial motor manager Roger Ball admitted that the fleet market had become more competitive. "But I wouldn't say necessarily that we're into severe rate cutting," he said.

"I honestly believe that we're a very responsible insurer. We will stay in there, but the way we'll do that is by not cutting premiums across the board."

Mark Bacon, head of motor at Zurich London, denied Zurich London was involved in a price war.

Bacon said: "While prices may fluctuate in motor fleet, Zurich is committed to offering sustainable risk pricing so that our motor fleet customers have greater consistency and predictability of premiums over the long term."