Will We See A Reduction In Insurance Premiums Next Year?

[youngmafbog]

With lock down there has been a drastic reduction in car theft and accident/incidents. Burglaries and robberies down too along with other such crimes.

Will we see a corresponding decrease in our Insurance premiums next year or will they hike up as per normal?

[youngmafbog]

For those that insist on links, here is one. Others around if yo uwant to look, remember Google is your friend :-)

https://www.theguardian.com/uk-news/2020/mar/26/coronavirus-crisis-leads-to-precipitous-drop-in-recorded

[barry1010]

No. Although I've just received my car insurance renewal notice. A whole 85p more than last year. I have been deprived of my annual haggle.

There will be other demands on the insurance companies - more claims on life insurance for a start.

[woofgang]

I don't think that my insurance premiums have ever "hiked"

[ToraToraTora]

I think you know the answer YMB!

[Zacs-Master]

There will probably be people SORNing their cars and cancelling insurance too so the Ins Co’s will probably claim they’ve actually lost revenue and therefore premiums will rise.

[naomi24]

No. Once people are back to work, the country will return to normal, as will the risks.

[Zacs-Master]

Would you have a timescale for that, Naomi?

[fiction-factory]

It's a competitive market - just look on the comparisons sites, so there will be lots of companies who want to undercut others. It's actually a risky business with little profit margin- one serious accident can cost several million pounds if someone cannot work again or becomes a quadriplegic. Claims will have fallen significantly this year but maybe there will be some fraud as people see a possible way to raise money in desperate times. But next year's premiums will reflect next year's risk which if things get back to something like normal will mean normal premium levels.

[Old_Geezer]

:-D
Good one ymb, but it's in the wrong forum.

[fiction-factory]

There may also be an increase in uninsured drivers, and the cost of accidents they cause have to be borne by the MIB which means those who do have insurance.
There have been quite a few reports in the last few weeks of speeding drivers, car races and resultant crashed cars, and the common theme is bored young men who have flash cars but no insurance

[barry1010]

The insurance companies really took a hit earlier this year with all the flooding, too.

[mushroom25]

//The insurance companies really took a hit earlier this year with all the flooding, too. //

only if they actually paid out.....

https://www.thisismoney.co.uk/money/news/article-7703437/How-insurers-using-small-print-refuse-flood-victims-claims.html

[aelmpvw]

won't premiums rise to make up for all the holiday insurance they've lost?

[Arrods]

"won't premiums rise to make up for all the holiday insurance they've lost?"

Probably offset by the claims paid out on cancelled holidays where people have the travel disruption cover.

[Arrods]

I didn't explain that very well did I? I misread the question.

[tomus42]

I'm going to take a wild guess and say no.

Insurance companies have just had to pay out gazillions on flood and storm damage. They won't be in any position to reduce premiums, and even if they were, they wouldn't.

[Deskdiary]

No.

To give a little background, I work in Reinsurance (basically we provide insurance companies with insurance - for example if you had a £1m claim, your insurance company may only be responsible for a quarter of that; they would pay the whole claim and then claim back the three quarters from their reinsurance company), and I can confirm we are entering into a hard market, which means there’s less capacity in the market and therefore it’s becoming a sellers market.

Without going into too many boring details, a hard insurance market is driven by losses.

My field is financial liability (professional indemnity, bankers bonds etc) so I’m not an expert in motor insurance, but what I can tell you is that the motor insurance book of most companies has a combined operating ratio of over 100% - in other words, they pay more out in claims than they collect in premium, but they balance this out by their more profitable lines of business and by investing the premiums.

However, there’s been a bad run of consistent and big losses on their more profitable lines which puts pressure on rates. Many insurers provide motor insurance as a bit of a loss leader.

The hard market is likely to exist for two or three years, and once they return to consistent profits, more capacity will be created and rates will soften.

Now more than ever is a reason to shop around.

[Gromit]

No.
Premiums will go up.

There is little or no relation between the crime/accident rate, and the cost of insurance.

[youngmafbog]

"There is little or no relation between the crime/accident rate, and the cost of insurance"

So by your logic if the accident rate tripled the premiums wouldn't go up?

[Deskdiary]

"There is little or no relation between the crime/accident rate, and the cost of insurance."

Absolute nonsense.