It’s been a challenging few years for the motor insurance industry, affecting both insurers and brokers. The knock-on impact has affected policyholders through higher premiums.
Years of insufficient funding have resulted in significant rate increases, market exits and shifts in appetites. Industry consultants, EY predict another year of unprofitable underwriting across the industry in 2024.
Whilst economic inflation stands at 3.9% and increased interest rates of 5.25%, these figures do not reflect the challenges faced by the motor insurance industry.
Repairs, second hand car values and long-term care costs have all been heavily impacted by a number of external factors including the War in Ukraine, Brexit and the legacy of Covid, leading to further premium increases throughout 2023 and into this year.
These external challenges coincide with the acceleration of the production of electric vehicles globally with motor manufacturers already producing vehicles that meet the requirement of 22% emission-free car sales (10% vans) by 2024.
All these impacts have created a perfect storm leading to claims inflation running far higher than average inflation. We have created this comprehensive motor claims inflation guide to help you explain the ongoing challenges in motor insurance to your customers.