News

When costs go up, you want to know why. This guide will give you the rationale behind why rates are increasing.

Property

• Climate change will play a major role in costs increasing in the future. For example, pressure on land has resulted in new developments being built on flood plains - so insurers can anticipate flood losses will be higher.
• Economic factors such as the market downturn are leading to more unoccupied property, which means more damage losses, with an increase in arson and other malicious damage. 
• Insurance market trends such as prolonged soft market conditions mean there's insufficient premium collected to fund additional claims.
• Building design and construction now involves the increasing use of materials which have a lower resiliance to the elements, hence changing the insured peril exposure. And there are more high rise buildings being built, leading to a higher concentration of values at risk, with significant firefighting issues.

Motor

• Vehicle repair costs are rising due to advances in vehicle design and increased safety features.
• For injury claims, the level and length of care has also increased due to medical advances. Bodily injury now represents on average 45% of the cost of a claim, with an average of £3,300 per claim.
• Rising hire car costs, with customers increasingly requesting a similar class of vehicle to their own following an accident.

Liability

• The compensation culture is increasing the average cost of liabilty claims and legal costs.
• There will now be additional costs following NHS recoveries, following the NHS charge revisions in April 2009 (a £171 ambulance charge, £566 each outpatient visit, £695 per day as an inpatient), with the impact now being felt.
• The workplace profile is continuing to change, with poorer health and safety performance at the lower end of the spectrum. There are also increasing health and employment issues associated with obesity and stress-related illnesses - while a longer working life span means lengthening compensation periods and increasing costs.

All of these factors are pushing up the price you pay for your insurance.