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MyClaim Market Update January 2010

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ABI provides guide to online insurance

Over two thirds motorists now shop online for quotes for insurance for their car, van or motorbike. Whilst recognising that this can be a good way to ensure insurance customers get the cheapest quote for their policy, the Association of British Insurers (ABI) has produced guidance to assist customers in making sure they understand their policy.  Important points to check for include the size of any voluntary or compulsory excess and what add-ons the provider expects you to obtain.

The Consumer Insurance (Disclosure and Representation) Bill

The Law Commission has drawn up the Consumer Insurance (Disclosure and Representation) Bill to reform insurance law, a move widely supported by the Trading Standards Institute.  In simple terms, the reform is to shift the burden of disclosure away from the consumer as it is at present to disclose all pertinent information that an insurer might want in assessing a potential claim.  The Bill looks at the pre-contract period and will instead require the insurer to ask all pertinent questions.

The Trading Standards Institute takes the view that the existing law, based on principles of absolute good faith, is out dated and can act unjustly in that honest customers can be treated in the same way as those who are fraudulent when obtaining insurance.  The Financial Services Ombudsman has recently declared that this position is unfair to consumers.  At the moment this issue is covered by codes of practise to ensure the consumer has some protection, but these changes in the law would enact this principle by an Act of Parliament.

British car drivers to face higher premiums

It has been predicted that in the coming year, British drivers are going to have to pay higher premiums to make up for the first losses insurers have incurred in nine years.  Consultants Deloitte believe it would require an increase of 5% in premiums to offset the income lost to lower investment returns.  Further figures indicate that motor insurance premiums are increasing at their fastest rate since 2003.

Premiere Medical Group buys Principle Medical Services

Premiere Medical Group (PMG), the medico-legal reporting company, has acquired Principle Medical Services, a company dealing with the provision of medical information to the life assurance market.  As part of its expansion moves, it seeks to provide medical reporting and screening services to the personal injury, life assurance and occupational health sectors.

Fall in UK premiums during 2008

An 18% reduction in net worldwide premium income to £215 billion has been reported by International Financial Services London (IFSL).  The decline particularly related to long term premiums which normally account for 80% of the UK’s insurance business. Occupational pensions premiums and life insurance were particularly hit by this reduction.  IFSL does however predict a return to growth during 2010.

Sainsbury’s Home Insurance warns of post-Christmas claims

A post-Christmas rush in making claims has been predicted by Sainsbury’s Home Insurance due to damage done over the festive period. This is for a number of reasons, including opportunist thieves over Christmas looking out for unattended homes, accidental damage done by lots of house guests and even just over stocking the fridge and freezer. 

HSBC sells insurance broking division

HSBC Holdings plc is to sell its insurance broking division to MMC UK Group Ltd for £135 million. The deal is also subject to partnership arrangements between the two companies.