So, what are the underlying drivers for the increase and what mitigating measures can you take?
The immediate trigger for the premium increases were the Solvency 2 regulations. Solvency2 is the insurance equivalent of Basel2 and require insurers to maintain 50%-100% more capital in low yield assets. To maintain return on equity, premiums must therefore increase or the motor insurance business line should be reduced (withdraw from market segments with long tail exposures and enter business lines with less risk and therefore less capital requirements.
Costs of bodily injury
Human life expectancy is increasing and therefore costs increase in case a person needs lifelong care and support due to a car accident related injury. Medical science is more advanced, providing more treatment options which also increases the costs of bodily injury claims.
More complicated car technology
With alternative power trains and more advanced in-vehicle technology, the cost of spare parts are increasing. The costs of equipment to perform repairs and finally the cost of labour has also increased. Partly due to training and expertise requirements that are very specific to individual makes and models.
Our DNA of transparency runs through our Fleet Insurance product. Being truly independent, we benchmark your current terms and conditions, your claims cost and accident statistics to uncover where significant savings can be made.
We have developed our Insurance Insights to provide transparency in your current insurance spent
We will be indicating the risk profiles, the optimisation potential, business case and the road map for an optimised set-up of your fleet insurance.