There has been a 42 percent increase in bodily injury claims against insurers since 2001, according to a new report, Personal Injury Claims Market in the UK, from Celent, a Boston-based financial research and consulting firm. This is despite safer cars, better roads, and recent decreases in road traffic accidents.
Key findings of the report include:
- The motor insurance sector is largest class of business in general insurance in the UK, with premiums representing 29 percent of total non-life premium in 2009. There are a relatively small number of active insurers, with 53 companies and 11 Lloyd’s syndicates actively transacting business, although more than 200 companies are registered.
- There were 24.8 million private motor policies in force in the UK in 2009. Over the past 10 years, policies in force have increased by 3.4 percent. This growth is largely due to the increasing number of private cars on the roads, although more recently the growth rate has slowed due to the weak car market.
- The hard trading conditions for UK motor insurers cannot hide a more fundamental problem of deteriorating underwriting results. Insurers have reported underwriting losses in motor since 1994, and 2009 had the highest ever reported underwriting loss. Combined operating ratios for the sector reached an all-time high of 121 percent in 2009.
Factors affecting these results include aggregators which have supported the price competition and UK consumers pay some of the lowest motor premiums in Europe. On the cost side, personal injury claims have rocketed to almost 50 percent of all claims costs.
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