BIBA sceptical of household premium rises
BIBA, the trade association of general insurance brokers, has criticised the decisions by some insurers to increase their household premiums.
It has described the increases as opportunistic and as a knee jerk reaction to this summer’s floods.
The association is reminding consumers that the market for home insurance is very competitive, and that is has yet to be seen whether the increases will be sustainable.
BIBA also urges homeowners to focus on finding the right kind of cover, rather than being guided by price alone.
Norwich Union is increasing premiums by 10% from the beginning of this week and Royal Bank of Scotland has announced that it expects “upward pressure” on home insurance premiums but has not yet said by how much.
A 10% increases will raise the average buildings and contents premium by £35 to £40 a year and policyholders living in areas prone to flooding can expect to pay more.
Norwich Union is facing a bill of around £165 million for the most recent floods in Gloucestershire and the south.
This will be in addition to the £175 million it will pay out for the June floods in the north of the country.
Royal Bank of Scotland, which operates the Direct Line, Churchill and Tesco brands, has so far taken a £125 million one-off charge in its half-year results as a result of the June floods.
The company expects the July floods to produce a similar charge.
Category: BIBA News, DirectLine Insurance News, Home Insurance News
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