The ABI noted earlier this year that car premiums are rising, with Jonathan Fong, the ABI’s Senior Policy Adviser, Motor Insurance, commenting:
With households battling the rising cost of living, the last thing anyone wants is a higher motor insurance bill. Naturally, every motorist wants the best insurance deal, and insurers are doing all they can to keep motor insurance as competitively priced as possible. Yet, like many other sectors, insurers continue to face higher costs. The price of certain raw materials and energy costs are rising at rates well above general inflation, and these costs are becoming increasingly challenging to absorb.
IE has also spoken to several salvage and repair specialists in the last year who say the costs of claims, especially on cars with battery packs is heading ever higher. Parts costs and labour rates continue to increase in the repair sector. Modern ADAS systems also require more recalibrating time as part of the repair sign off process too. Add all that up and something’s got to give.
In this piece Edward Hill, SVP European Markets, INSHUR, looks at how utilising every bit of data insurance brands can help to keep the lid on price rises.
The Association of British Insurers’ has claimed that motor premiums will “probably need to go up further” because claims costs are still increasing. At INSHUR, since we predicted these increases were on their way early last year, we’ve been working hard to make sure our customers feel as little impact from them as possible – by ensuring pricing didn’t experience huge increases and that our claims infrastructure was robust enough to weather the storm. After all, our customers are hard working on-demand drivers from whom every penny counts.
Historically, insurance organisations have been very siloed in how they manage portfolios, but today’s tough environment no longer supports that. Now, insurers can’t just do one thing well in order to remain profitable while protecting our customers. It’s about ensuring the entire organisation – underwriting, pricing and analytics, validation and counter fraud, claims management and technology – pulls together to stay lean and mitigate rising costs.
Everyone at INSHUR works together to maintain a laser focus on loss ratio, as part of a long-term customer-centric strategy to smooth out any bumps along the way and, ultimately, do what’s right for our customer. This approach is underpinned by our market-leading technology and an almost fanatical focus on data – both in-house and from our partners – delivering one source of truth across the organisation, enabling real-time changes to pricing models as and when they’re needed, and giving our customers access to the fairest deals on the market.
2023 has produced a perfect storm for the insurance industry, with inflation, government turmoil, scarcity of parts, cost of living crisis, and regulatory constraints being just a few of the elements creating a challenging environment. By taking a long-term view and adopting an aggressive intervention strategy, insurers can stay ahead of the game to reduce the impact on customers, who are also grappling with financial challenges of their own.