Insurance Totals for Drivers on the Rise reports Car Freedom Today
Reinsurers pressing more fees from Insurers, which knocks forward to customers
The brokers have placed blame on the rising cost squarely on the heads of reinsurers over the way that people are being compensated for their accidents.
Reinsurers are firms that offer “insurance for insurers”, and thus remove the risk for the insurance firm that has the direct contract with the individual consumer. Broker Willis Re stated on Monday that the motor insurers that have had big enough loses to trigger reinsurance payouts have seen their own rate increase 35pc and higher on their policies. That change took affect at the start of the new year, according to Re. Those who did not rely on the reinsurance payments still faced a rise of 20-30pc, depending on the specifics of their agreement.
The Financial Times reported that the knock-on effect for policyholders would be anywhere from 3pc-10pc rise, and according to some estimates that would mean hundreds of pounds extra for particular drivers.
Willis Re stated that larger and more seriously bodily injury claims may be part of a growing percentage that are handled out of court by periodic payment orders (PPOs). Those fees are paid at regular intervals over the lifetime of the injured party, rather than in a lump-sum of money.
Grange Turner, who is executive Director of Willis Re has stated that a greater than expected push on insurers and reinsurers lead to the need to weigh up factors such as the life expectancy of the claimant, as well as wage inflation.
"Many reinsurers have become increasingly concerned about taking all of these variables on to their own balance sheets."
Peter Harrison, car insurance spokesperson for comparison website MoneySuperMarket.com, stated: "Any additional cost won't go down well and I'm sure that cost will be passed on."
He also noted that, "We will see a lot of volatility in the next few weeks," he said. "This has been a very big change in the way that people do things."
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