RE: Premiums1 Jul 2023 15:08
This came out a week ago so it's no wonder premiums increasing. Unfortunately many will find premiums going up it seems but to pay higher claims rather than profit.
Write offs must be more expensive. I have just sold a 69 plate seat for £1400, around 11% more than when I bought it as a 6 month old ex demo back in 2020. Should have bought a few, would have been a better investment than my Aviva shares 😀
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Insurers must rigorously assess the impact on their solvency of the rising cost of settling car, property and other claims and ensure they have sufficient reserves, the Bank of England has told the sector, Reuters reported.
The BoE said that claims inflation due to factors such as rising wage, medical and raw materials costs is expected to affect all general insurers.
"There is a risk that persistently elevated claims inflation might result in a material deterioration of solvency coverage for some firms unless they take appropriate mitigating actions," the BoE said in a letter to chief actuaries of general insurers, Reuters said.
"Technical provisions must be calculated based on up-to-date, credible information, and realistic assumptions. Therefore, claims inflation should be robustly considered."
The BoE anticipates that 2023 year-end will be more challenging for reserving teams at insurers. Firms should be mindful of this when undertaking their mid-year reserving exercise, along with capital and business planning for 2024 later this year, BoE said, adding that it may check with firms how they have considered these issues.
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