The issue of rates — and, more specifically, motor rates — is certainly getting a lot of attention at the moment.
In recent weeks, Zurich's new general insurance CEO Stephen Lewis told the world that it would be putting up rates in brokered business by 20% from March, while last week Fortis CEO Barry Smith offered some suggestions to 'fix' the 'broken' private motor market.
This all followed EMB's pessimistic forecast that combined loss ratios for the private and commercial motor insurance market in 2009 were set to exceed 115%.
Now, it is the turn of Groupama Insurance's managing director Laurent Matras and Aviva's new general insurance chief executive David McMillan to join the debate.
Mr Matras offers an amusing put very pointed take on where the costs of the motor insurance cake end up, and comes to the conclusion that the customer's £400 premium is unsustainable and an insurer would need another £65 to break even, which is not quite 20% but close.
Mr McMillan echoes others in pointing out there is something wrong with the premium/costs balance, but refuses to get caught up in the demand for blanket rates rises.
Instead — and this could be the first indications his regime will be different to Igal Mayer's — Mr McMillan is stressing it will continue to price based on the individual risk. Whether this is a cop out, or a mature stance is probably based on your desire for an eye-catching headline.
Talking of which, the latest AA Premium index certainly grabbed attention by reporting the average quoted premium for comprehensive cover rose by 18.7% in Q4, the largest annual increase since it started in 1994.
What can we make of this? The AA appears to indicate that rather than the hot air about rate increases spouted before, the market as a whole — rather than pockets — is now taking the unprofitability of motor seriously.
As for the comments of the insurer bosses, could some be planting a flag before their 2009 results are published to show they are already taking the necessary remedial action that will be demanded by investors?
Post is certainly going to give the 2009 motor figures a lot of scrutiny as, no doubt, will those who have an interest in the sector from brokers to credit hire firms, from aggregators to personal injury lawyers. And, come mid-March, we will all know if EMB has been better at forecasting than many weathermen.
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