Insurers plan to hike motor premiums
Published 17/11/2010 | 05:00
THE majority of motor insurers expect to increase their premiums for motorists this year, a new survey has found.
A rise in motor premiums in the next few months will buck a trend, over the last year, which has seen premiums barely move.
But new research commissioned by consultancy firm Deloitte shows that a third of insurers expect to hike premiums by between 5pc and 10pc, in what will come as a blow to drivers.
The increases will be pushed through in the next year, with nine out of 10 insurers responding that they expect to jack up premiums.
Higher motor insurance costs mean that moves by consumers to seek out seek better value appear to be backfiring.
The survey found that drivers are reacting to the recession by choosing lower-cost cover, such as third-party policies, and are also choosing to keep second cars off the road.
More than a quarter of drivers are also seeking out better value by getting quotes on the internet, where prices tend to be lower.
Drivers are also increasing the excess on their policies as a way of keeping premiums down. The excess is the amount the driver has to pay themselves in the event of a claim.
But this has hit the profitability of insurers and wiped out their attempts to increase what is charged on individual policies. Deloitte's Dick Tulloch said the attempts by consumers to act in a savvy and sensible way meant profitability in the industry has been hit.
Most insurers are just about breaking even at the moment, and he predicted that many would make losses next year. This was why they are trying to push up premiums.
Recent research from the National Consumer Agency, the state body that promotes consumer rights, found that consumers can save up to €720 a year by seeking out the best-value cover in the market.
The research found that eight out of 10 motorists who switched insurer were able to make savings on their premium.