It is a well known fact that major economies of the world have still not turned around fully. However, financial experts are of the opinion that economies are likely to show signs of recovery in mid 2011. As such the “adjustments” the different sectors have to make to survive the crisis is still continuing. One such sector is the motor insurance industry, you will get the vast idea about auto insurance online. which is likely to see increase in motor insurance premiums in 2010.
Reports suggest that the auto insurance sector has incurred loss of approximately GBP1billion in 2009, which is likely to continue in 2010. However, instead of GBP1 billion, the figure may be approximately GBP12 billion in 2010.
It is being anticipated that the motor insurance carriers are likely to increase the premium costs by as much as 5% so that the loss incurred by the vehicle insurance providers can be recovered to some extent. The insurance sector has suffered alarming underwriting loss. A similar situation had taken place in 2008. However, during 2008, purchasing power or consumer spending had not deteriorated, so it was easy to recover the loss. With the current economic shortfall, chances of recovering underwriting loss appear to be bleak.
Statistics obtained from Deloitte’s Motor Premium Index indicate that the rate at which motor insurance rates have escalated in the current year is one of the fastest since 2003. Premiums related to comprehensive coverage have escalated by 11% through September 2009. And during Q3 of 2009, the rise was approximately 4%. This may come as relief for the motor insurance providers but it is bad news for the consumers who are already cash strapped and financially stressed out due to liquidity crunch.
Consumers are striving hard to get hold of vehicle insurance that is affordable and offers proper coverage. But chances are that you won’t get both. So, you need to strike a balance between a coverage that will meet your insurance requirements and affordable premiums that will not force you to abandon your motor insurance policy.
