in association with
Slight rise in motor premiums, saysAA T
he AA British Insurance Premium Index
indicates that, in the three months to the end of September, car insurance premium rates fell by 0.3% (or £2), meaning that the annual increase has now dropped to 16% for the 12 months ending September 30th.
Simon Douglas, director of AA Insurance, says, “The
past two years have seen the biggest ever rises in premiums as insurers struggled to close a widening gap between premium income and claims costs. Although historically costs had been rising, premiums had not and, at the end of 2009, for every £100 taken in premiums, £123 was being paid out. “Something had to give.
ABI warning on government planning reforms
he ABI says that government plans to reform the planning process “must not lead to developments being built in flood risk areas, so making flood insurance more expensive, or even unobtainable”. The association says that the reforms must include requirements for:
T
● the regular publication by local planning authorities of any planning applications given against the advice of the Environment Agency;
● water companies to be statutory consultees on all development applications in flood risk areas, in order to confirm the capacity of their systems to adequately drain the proposed development.
The ABI points out that around one in six properties - 5 million homes and 185,000 businesses - in England are currently at risk of flooding. It is concerned that proposals to give local planning authorities more powers in the planning process will lead to a rise in developments being built in flood risk areas.
But the gap has now closed sufficiently to allow insurers to start pricing more competitively again.” However, he warns that there is still inflationary pressure for insurers, and that the respite may be short lived.
Meanwhile, the AA index also indicates that the cost of a typical home building policy rose to its highest
ever level over the three months to the end of September. It reports an increase of 14.3% in the 12 months, most of which happened in the first quarter of 2011. With the average cost of a contents policy rising by 2.2%, the average for combined buildings and contents cover is £205.55, an increase of 5.7% over the year.
FOSuphold92%of PPI complaints
C
ommenting on PPI complaints figures from the Financial Ombudsman Service, Philippa Handyside, strategic business services senior associate at Pinsent Masons, says that, while the drop of 66% in
complaints is significant, it does not mean that the PPI industry is out of the woods.
She says, “Media
coverage and advertising by claim handling firms have flushed out most of those with cause to complain about the mis- sale of a PPI product.
However, the FOS has also upheld a staggering 92% of PPI mis-selling complaints. Such odds mean that firms are settling a greater portion of complaints as part of their own complaints handling procedures, knowing that their chances of successfully defending a sale to the FOS are very slim.”
She concludes, “If the recent approach of the FOS to PPI mis-selling is carried through to the tail of remaining complaints, there could be plenty of pain yet for PPI distributors and product providers alike.”
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www.manchesterunderwriting.com NOVEMBER 2011 insurancepeople 23
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