Survey: Motor insurance premiums expected to rise next year

Over 89% of Irish motor insurance companies said that they expect their company to increase premiums in 2011, according to a new survey.

Some 53% expected an increase of up to 5%, 33% expect increases of between 5% and 10% and 3% expect an increase greater than 10%, according to Deloitte’s annual Motor Insurance Survey.

This is lower than last year where the majority (68%) were forecasting rate rises well above 5%.

“The challenge for motor insurance companies is to balance the market forces that are currently at work,” said Dick Tulloch of Deloitte.

“On one hand an increasingly price sensitive and savvy consumer is leading to fluctuations in companies’ market share. On the other hand, decreases in the number of premiums, and the level of cover in these premiums, are impacting significantly on profitability.

“What’s clear is that companies operating in the industry will need to align premium rates with the increases in claims and expense costs while also providing appropriate policies for recessionary pressed customers.”

The survey confirmed that despite the welcome fall in the overall numbers killed in motor accidents, some 74% consider that road safety issues remain a high priority in the public mind.