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BIBA releases latest motor premiums index
Written by staff reporter
The latest Insurance Price Index from the British Insurance Brokers’ Association (BIBA) and Acturis that tracks £6bn of actual premiums paid annually via insurance brokers before Insurance Premium Tax (IPT) shows that premiums for motor insurance increased dramatically in the final quarter of 2017.
The index tracks premiums paid for personal motor insurance, commercial vehicles and motor fleets and compares them quarter on quarter. Each of these three types of motor insurance showed increases with the main effect felt by car and van drivers whose premiums have risen consistently through 2017 and their quarter 4, 2017 premiums showed 10.7% and 9.1% increases respectively over the same period in 2016 before IPT is added.
In addition to the impact of fraudulent whiplash claims, the government's March 2017 change to the discount rate dealt a considerable blow to the cost of motor insurance. Further bad news came with the doubled rate of IPT since 2015, reaching 12% in June 2017. Now, the average car driver pays nearly £60 in tax and SMEs almost £200.
Executive director of BIBA, Graeme Trudgill, said: “There are a number of reasons that motor insurance premiums have risen and BIBA is campaigning on all of them. We are pushing for legislation to be passed via the Financial Guidance and Claims Bill which will bring Claims Management Companies under the regulatory auspices of the FCA. We also await the progress of the Civil Liability Bill to enable the recommendations of the Insurance Fraud Taskforce to be implemented; which will reduce the rate of fraudulent claims.
“We also fed into the government review of changes to the compensation discount rate and are calling for legislation to be brought forward that will implement changes that will ensure the principle to the 100% compensation for injury claims is met.
“And finally, BIBA has long campaigned for a fair system of taxation. We believe that Insurance Premium Tax is a tax on protection, and is now at a level that impacts the uptake of insurance. We want the Chancellor of the Exchequer to commit to no further increases in this regressive tax.”
CEO at Acturis, Theo Duchen, added: “The figures from the last two quarters of 2017 on private car and commercial vehicle premiums are clear. These are big increases for any individual or business to swallow. We are in a period of great uncertainty in the UK and I support BIBA’s call for a period of stability with no further changes to Insurance Premium Tax.”