Car Insurance

The U.K. motor insurance market has suffered underwriting losses of more than GBP5 billion ($7.8 billion) in just seven years, Standard & Poor’s Ratings Services said in a report published today.

“Having failed to reach ‘breakeven’ or report a profit since 1994, the market is in a difficult situation,” said Standard & Poor’s credit analyst David Laxton. “Investment income earned by the market will have mitigated the underwriting losses in part, but will in no way have covered them, leaving insurers with very significant operating losses.”

With premium growth having halved in 2001, the market is now also faced with the prospect of renewed competition, suggesting that the current insurance cycle is close to peaking.

A brief return to profit by year-end 2002 remains possible, but the market’s long-term profitability looks uncertain. A resurgence of competition will come as something of a relief to motorists, who have seen the cost of their insurance policies rise exponentially in recent years, but threatens to ruin any chance of medium- to long-term profit for insurers.

Heralding the return of competitive forces, premium growth in the U.K. motor insurance market has more than halved, falling to 8% in 2001 from 20% in 2000. “The slower rate of premium increases is symptomatic of the growing competition for profitable business; evidence that has been supported in 2002 by a number of recent advertising campaigns promising motorists lower rates,” said Mr. Laxton.

Nevertheless, rates remain at a high level, with a break-even or better result possible for the first time in the current insurance cycle at year-end 2002, due to positive pricing actions in 2001. “Gross premiums written by the market totaled GBP10.4 billion in 2001, leading to a 10-percentage-point fall in the average combined ratio to 103%, and edging the market closer to the elusive 100% break-even mark,” said Mr. Laxton.

He added, however: “A further significant slowdown in growth during 2002 and 2003 — alongside recent evidence of an increase in claims costs — could reverse even the near-term forecast for profitability.”

Although recent new entrants to the market–such as esure and Egg — have resulted in more insurers vying for market share, it is the top 10 groups that continue to dominate the scene, representing 84% of total gross premiums written in 2001.

Among the top 10, Direct Line has outperformed its peers, reporting a combined ratio of 91% in 2001, a 9% improvement on 2000. Notably, the group is one of only three groups in the top 10 — including Allianz and Fortis — to have reported an underwriting profit. Aviva, meanwhile, remains the largest player in each of the main motor insurance classes; comprehensive, noncomprehensive, and fleet. Of these classes, noncomprehensive insurance saw the strongest premium growth, increasing by 25% to GBP900 million. Fully comprehensive insurance grew by 16% to GBP5.9 billion, and fleet insurance by 3% to GBP1.5 billion.

AN INSURANCE company is refusing to pay out a pounds 400,000 claim to the widow of a motor cycle accident victim because he had a mistress and his marriage would not have lasted.

The soldier’s wife did not know about the other woman until he died in the crash with his lover riding pillion, the High Court was told yesterday. Sadie Dalziel, 30, said she had “worshipped the ground walked on” by her husband, Jason, and was shocked to discover his double life. Elizabeth Simpson, who survived when the bike crashed in Hull in 1996, also had no idea there was a wife and considered herself his fiancee, the court was told.

Lance Corporal Dalziel, who was 25 and due to start a tour of duty in Kosovo, also left a baby daughter, Caris, now five.

Mrs Dalziel, of Burham, Kent, wants damages from the other driver, Gary Donald, from Doncaster. His insurers have admitted 80 per cent liability but say the widow should have only modest damages because her marriage was “unlikely to have survived”.

Mrs Dalziel told Deputy High Court Judge Robert Moxon-Browne QC that if her husband had survived she would have stayed with him even if she had discovered about the other woman.

Howard Elgot, representing Mr Donald, told the judge Miss Simpson, of Shiptonthorpe, near York, had been told by the soldier he would move to be near her when he returned from Kosovo in late 1996.

Mr Elgot said Dalziel began his relationship with Miss Simpson in January 1995 and proposed to her in November the same year, eight months after marrying his wife. He said the soldier had disciplinary problems in the Army and his career had also been unlikely to survive.

The widow’s lawyers argue that she and her daughter were dependent on Dalziel and are entitled to substantial compensation for his death.

THE MOTORBIKE is making a comeback. Last year motorcycle and scooter sales hit their highest level for 13 years, says the Motor Cycle Industry Association, with over 120,000 machines sold in the UK.

You might think that this is because more of us are buying trendy scooters, but the best-selling bike of 1998 was a whopping great 900cc Honda. The truth is that a growing number of thirty-something and forty-something professionals are splashing out on luxury high- performance bikes to ride in their spare time.

Ensuring that these bikers ride safely is now a concern for the insurance industry and the Department of Transport. The rise of the thirty-something biker led many insurers to think that biking was entering a new, safer era. Far from it. “The problem is that people are getting on bikes again maybe 15 or 20 years after owning their first bike, without realising that big bikes are a lot more powerful now,”

explains Richard Alger, market support manager at Norwich Union. “A whole new set of riding skills are now required and many born-again bikers are having accidents because they don’t realise this.” So if you are thinking about joining this band of born-again bikers, you need the right insurance. Specialist insurance broker MC Edwards, which has put together a policy for Peugeot scooter owners, offers comprehensive cover at a flat rate of pounds 225. This is reduced to pounds 150 if you just take out third party, fire and theft cover. Insure a classic scooter (more than 20 years old) and your premium could be pounds 40. The premium for a high-performance bike is more expensive. Under Carole Nash Insurance Consultants’ Ultima policy, an office worker of 39 living in Milton Keynes with two years’ no claims and adequate security, riding an pounds 8,000 Yamaha YZF-R1 registered this year, would pay pounds 534. There are three ways to buy motorcycle insurance: through a specialist insurance broker, from a motorcycle dealer (usually arranged via a broker) or from a direct insurer. The only direct company actively selling motorbike cover is Hastings Direct. When the insurer burst on to the market a couple of years ago, it was offering some cheap premiums. They are not as competitive now but it is still worth getting a quote. Motorcycle Direct is also offering good premiums. Motorbike insurers have become more sophisticated but there are two basic things all of them look for: adequate security and evidence of safe and competent riding. Motorbike theft is a growing problem. A bike is stolen every 13 minutes, and for this reason insurers will require an immobiliser on many higher- value bikes. In some cases the owner will be required to garage the machine and secure it to the floor with a ground anchor. To encourage owners to take theft seriously, most insurers will offer discounts for security devices. For example, Cornhill offers a 7.5 per cent discount for garaging and between 5 and 7 per cent for security devices. Norwich Union offers discounts of up to 8 per cent for immobilisers and tagging devices on its Premier Bike policy. Anyone wanting to ride a motorbike or moped must complete Compulsory Basic Training (CBT). The training is thorough, covering areas such as bike maintenance, gear changing and junctions. Many motorcyclists also undertake advanced rider training. Insurers will usually reward these policyholders with a discount. For example, Motorcycle Direct has an agreement with the British Motorcyclists Federation that anyone successfully completing its riding scheme will get a 25 per cent discount. Most motorbike policies have similar standard sections, covering damage to, or loss of, vehicle, liability to third parties and usually legal expenses. However, some specialists offer policies with a wide range of standard and optional extras. The first thing you should look for in a policy is an emergency breakdown service. Norwich Union charges an extra pounds 28 for the RAC’s service, Bennetts also offers RAC rescue and Motorcycle Direct offers a recovery service from DAS. Lombard is one of the few companies that does not provide roadside recovery. Most policies will also offer automatic green card cover for riding in Europe. Check whether the policy covers personal possessions; some do not and others have low limits. Carole Nash’s Icons has a limit of pounds 1,000 for helmets, leather and other accessories; Norwich Union charges an extra pounds 22 for pounds 250 of possessions. Also ask if personal accident insurance is available - Norwich Union is unusual in offering up to pounds 1,000 of cover. If your motorbike is damaged beyond repair, some companies - such as Bennetts and Motor-cycle Direct - will replace the bike if it is less than six months old and if the damage exceeds 70 per cent of its listed price. Finally, you must check the excess. Most insurers will base this on a sliding scale according to the bike’s power. It usually ranges from pounds 100 to pounds 500. Beware some of the small ads in the back of motorcycle magazines. The premiums maybe cheap, but the excesses can be as high as pounds 1,000. Tim Collison is editor of `Professional Broking’ magazine. bike specialists Bennetts, 0870-333 0007 Carole Nash, 0800-298 5500 Devitt’s Direct, 0645 279305 Motorcycle Direct, 01454 419801 Hastings Direct, 0800 001066 MC Edwards, 01536 510100 NU Direct, 0800 125750 For Norwich Union, Cornhill, Lombard and Eagle Star policies, contact a specialist broker.

Strong competition in home and motor insurance failed to take the gloss off results from General Accident, which beat market forecasts by turning in a record pounds 428m profit before tax last year.

The bottom-line figure, which rose from pounds 295m in 1993, was pushed up by a particularly strong surge in business in the final quarter. GA, one of Britain’s biggest composites, said it was well-placed for further progress this year, despite the fierce competition in the market and the conventional wisdom that the general insurance profits cycle is peaking.

Nelson Robertson, chief executive, said: “We’re on to a good profits stream now, and we need to manage the downturn in the UK market. Obviously we can’t sustain these profit increases in the UK, but that represents only 36 per cent of our business now, and the other parts of the world are improving. Even if flat profits are inevitable in the UK, progress in other areas will compensate.”

GA’s top management accepted that there had been downward pressure on premiums for home insurance, but said the market was more stable than motor business, where the arrival of direct insurers has squeezed margins across the industry.

Bob Scott, deputy chief executive, said: “Some people may save 10-15 per cent this year on their household premiums, but that is because insurers are differentiating between customers. Those who have poor claims records may see premiums rise, while those who are in neighbourhood watch schemes, for example, could see reductions of up to 25 per cent.”

GA bucked the trend in its life insurance division, with profits of pounds 53.3m ( pounds 49.1m) despite the downturn as a result of the pension transfers scandal and the bad publicity about endowments. Life premiums rose from pounds 866m to pounds 887m.

Losses from the estate agencies edged up pounds 500,000 to pounds 10m, but Mr Robertson said the insurance and pensions business that came through the chain made it a business worth remaining in.

You can get cheap auto insurance for your car if you carefully follow certain steps. Be it for a new or an old one, the cost is a big issue with many of us. Every year, we have to shell out a certain amount in order to get fresh policy. Whether you are purchasing a new vehicle or you need to renew it for your old car, it’s advisable to get several quotes, so that you get lower premium rates for the insurance.

For Old Vehicle: Check Out The Condition

If you are purchasing an old car, the premium depends mostly on condition and its maintenance. Still you can get good and cheap auto insurance rates if you search for quotes online. Online quotes are the quickest way to get quotes for your vehicle. You are able to compare rates and may negotiate a better deal based on the information gathered.

For New Vehicle: Make Use Of The Features Available

In case you are purchasing a new car, you will be a hurry to grab the first insurance policy you come across, as you want to take it home as soon as possible. But, don’t hurry up things, or might end up paying a much higher amount for getting your car insurance UK.

Many car dealers now-a-days have internet access and list of reputable companies websites, offering various deals for your vehicle. It’s a profitable arrangement for the car dealer also, where they bear no risk of losing a customer due to inability of deciding for an insurance policy. Thus you can search for cheap auto insurance for your new car, right at the dealer’s showroom.

Tips For Getting Cheap Insurance In New York

For people staying in big cities like New York, car insurance becomes a very costly affair. This is because, vehicles are considered to be at a very high risk of getting stolen, broken, being in accidents in big cities. But you can get New York car insurance at a cheap rate if you ensure some basic safety features. You may install fire alarms, burglar alarm, and steering lock; etch your registration on the window screens. Apart from these, its advisable to get a safe parking place for your car, rent a garage or a covered and secured parking place. This will lower the quotes significantly and you will get it for your vehicle at lower rates.

The amount of the premium also depends on the type of cover you are going for. If it is for basic coverage, quotes are low, if it’s a comprehensive insurance, you will find higher quotes. Weight your risks and your budget and then decide for the kind of policy you want. Get cheap auto insurance by assuring safety and good maintenance for your vehicle and by comparing the different quotes wisely. Good luck in finding the best quotes!