Premium Levels Fall For Car Insurers


Figures presented at our 23rd Annual Motor Insurance Seminar show that UK motor insurers are struggling to make a profit on car insurance premiums. In 2012, the total motor insurance premiums were worth £13.1bn, about £200m lower than in 2011. Between 2009 and 2011 the total value of premiums rose by nearly £2bn taking the market from £11.4bn to £13.3bn. Insurers in 2012 posted a net combined ratio of 105%, which means the combined cost of claims and expenses was £105 for every £100 of net earned premium. This is a slight improvement on 2011 when the net combined ratio was 106%.

In 2012 we saw premiums fall by about 1.5% at a market level and may well mark the top of the underwriting cycle. Based on our consumer attitudes survey, motor insurance premiums are likely to fall for the remainder of 2013, which consumers will welcome. In the past, once the market starts lowering premiums it has been difficult to reverse the trend.

During the period before the start of the financial crisis, insurers could rely on...

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