Covea warns of underinsurance threat
9th November 2023Tweet
Covea’s recent Personal Lines broker networking event highlighted the challenges posed by inflation and rising repair costs, and challenged the sector to do more to support customers during this cost-of-living crisis.
Motor insurance premiums have gone up 21% in a year according to the ABI Insurance Premium Tracker, while home insurance is 10% higher than in 2022.
But despite these rises premiums have not kept pace with rising claims costs, with ABI reporting a 29% rise in motor claims and an 11% increase in home claims over the last 12 months.
The trend is continuing. In the second quarter of the year vehicle repair costs increased 46% compared to the same period last year, while replacement car costs leapt 52% and vehicle theft payouts increased 53%.
The property market is facing similar challenges due to higher logistics costs, a shortage of materials and labour, and a sharp increase in alternative accommodation costs
Covea has warned that as a result underinsurance is on the increase, pointing to data from RebuildCostAssessment showing that more than 90% of buildings in the UK are currently insured for the wrong amount.
The company said, “Amid uncertainty of the macroeconomic environment, there remains a crucial role for insurers and brokers to continue to deliver for customers, providing reassurance, education around premium transparency and making sure help is readily accessible. As an industry we need to ask how we can continue to ensure good journeys for our customers, define what great value products and services will look like in the future, while at the same time seeking new ways to control premiums and claims costs with technological innovation and smarter ways of working.”Tweet