Your Car Insurance Premium Will Rise - Deloitte

A report from Deloitte predicts that the £12 billion motor insurance industry will make losses in 2009 and 2010, the first time since 2000. The report suggests that motor insurers would need to raise their premiums by 5% to replace the income lost from lower investment returns.  

A spokesman for Deloitte said "In 2008...motor insurers were making an underwriting loss of £5 for every £100 of premium.  Investment market conditions were good enough for insurers to recoup this underwriting loss and make a small insurance profit. In 2009 I don’t think that insurers will be able to rely on investment performance to save them from making a loss…This is not such good news for consumers who may find it increasingly difficult to shop around for a cheaper premium at renewal." 

Deloitte’s Motor Premium index shows that insurance companies may already be reacting to this likely loss, as motor premiums are increasing at their fastest rate since the index began in 2003. There was an increase in premiums for comprehensive cover of 4% over the quarter, and 11% from Jan-Sept 2009.

The news that insurance companies are increasing their premiums to cover losses is yet another blow to UK motorists, who are still reeling from the recent increases in petrol prices, caused by higher oil prices and the usual annual increase in tax.  Given that a report was release recently which suggested that Mechanics’ hourly charges were racing ahead of inflation, it is safe to say that the UK motorist probably feels a little under the cosh.  There is slightly better news that your car is worth a little more now than it was 6 months ago, the first time this has happened in the UK second-hand car market, but this is obviously only of benefit if you sell your car and buy a new one.

At least there is a way that you can save money on car parts, with Find-a-Parts’ used car parts location service.