Total payouts are declining, the number of claims are declining, why are our premiums increasing?
The general public are constantly told that insurance fraud is on the rise, year after year, and it is crippling insurers, raising premiums for everyone else. But what do the statistics actually say?
Thompsons Solicitors revealed that since 2010, the amount paid out by insurers for claims has fallen by a staggering 29%. This theme continues elsewhere, in 2010 The Association of British Insurers said that payouts hit £8.3billion whereas in 2014 this figure had plummeted to £5.89billion. A whole £2.4billion drop.
Thompsons Solicitors said these findings contradict: “Assertions by industry executives backing government plans to attack access to representation - and proper compensation for people injured in road accidents - by increasing the small claims limit from £1,000, to £5,000”.
What this means is that there will be significantly fewer claims for things like whiplash, be it genuine or not. Mark Wilson, Chief Executive for AVIVA, claimed this: “Ends the fraud pandemic”.
Thompsons Solicitors is not convinced there is a pandemic and that the scale of any problem is: “Cynically exaggerated to attack the rights of honest motorists”.
Tom Jones, Head of Policy, said: “Where is the evidence of a fraud pandemic”?
He argued that Association of British Insurers data: “Shows claims costs have fallen dramatically in the last 5 years, meaning the major car insurers and their shareholders have had a huge profits and dividends windfall.”
He continued: “It was only in August that Mark Wilson was telling his shareholders that its general insurance underwriting profit in the first 6 months of 2015 was its best in 8 years.”
Mr Jones suggested: “AVIVA want to have it both ways – they want us to believe there is a pandemic, but on the other hand they say they are doing well. They will get away with it for as long as they are allowed to hide their profit breakdown. We say if there is a crisis show us the evidence from your figures so they can be independently verified because the ABI (Association of British Insurers) stats suggest their statements don't stack up.”
He added: “Most of the car insurers are making record profits and seeing their share prices hit records highs (and) outperforming the rest of the stock market.”
The solicitor continued: “Meanwhile, premiums have increased 9.2% in the last year, and motorists are threatened with legal changes that will mean they will either see less compensation because they will have to pay for their lawyer from their damages - or they will have to take on insurers on their own if they are unfortunate enough to suffer a road accident.”
He concluded: “On the evidence of the past few years, the government’s legal changes will deliver only one thing – a continued profits bonanza for the car insurers.”
So, why do you think insurance premiums are rising?— Motoring.co.uk (@motoringcouk) January 13, 2016