Private motor insurers turn profitable in 2009
A report by Datamonitor, the market analyst, claims that next year, UK motor insurers will make a profit for the first time in 14 years.
The rising cost of claims and strong competition in the market will leave the UK private motor insurance market in the red again this year, but it is expected to make a profit of around £30 million in 2009.
In the past decade, the increased cost of personal injury claims has contributed to the sector’s lack of profitability and at the same time insurance companies have been sacrificing margins to gain market share.
According to Datamonitor, this trend became particularly marked from 2001 onwards, with the result the market has lost millions of pounds each year
Andrew Haslip, author of the report, says: “2009 could be an historic year for the private motor insurance market, putting an end to a painful 14 consecutive years of losses. While insurers have needed to raise their prices, they’ve been unable to do so due to the level of competition between insurers and the fact that the vast majority of consumers buy on price.”
However, Mr Haslip is predicting that private motor insurers could be making losses again in 2010, as competition intensifies. He makes the point that 85% of drivers buying cover online base their choice on cost.
Category: Car Insurance News, Insurance News
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