Editor's comment: The motor market is shot
A senior industry figure told me this month that it is the "worst time" in the history of the motor market for insurers. A pile of news has confirmed this, including RBS's loss of over £200m in its first-half results, Equity's reserving issues and NIG pulling out of the personal market and calling the business "unviable". The list goes on.
It is clear that the recession has taken its toll: there has been a surge of bodily injury claims and increases in fees paid to lawyers, yet these numbers show a greater malaise in this market. Despite the difficulties, we are still bombarded day after day with television adverts promoting the cheapest premiums. The adverts are prohibitively expensive to produce and air and for what? To give people premiums that the industry cannot afford?
This makes little sense and I am surprised that more insurers are not abandoning comparison sites and their direct arms to instead partner far more closely with brokers, developing greater understanding of the changing risks involved in the market. There is little doubt that pricing and underwriting needs to improve.
There is some sign of hope. François Xavier Boisseau, chief executive officer at Groupama, said while announcing improved results: "The double-digit rate increases that we have seen in private motor lines suggest that the market is finally serious about returning pricing to a level where there might be an opportunity for profit. It certainly feels like we are beginning to stem the bleeding but if we are to return the patient to rude health then we must continue with the same sort of medicine." Indeed.
Utley weds and moves on
Having attended Neil Utley's spectacular wedding at his home in August, thoughts turn to where he might pop up next after leaving Equity at the end of September, a company where he has been a huge presence. With Provident up for sale and on his radar and as chairman of Hastings Direct, it is certain he will not leave the industry any time soon.
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