Premiums set to rocket
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• Vehicle insurance rates could rise by as much as 20% during the next year, warns David Campbell, City commercial manager of General Accident, as insurance companies try to recoup the losses they have suffered on vehicle insurance since 1982.
"Our trading results and those of the market last year were extremely poor," says Campbell. "Very substantial losses were made following on from previous years. Rates have still not risen sufficiently to counteract the depressed premium levels produced by the soft market conditions prevalent before 1982."
Speaking at an RAC seminar on fleet road safety, Campbell said that insurance companies are facing more costly claims, so even the large increase in premiums of recent years have failed to cover claims.
"Underlying causes must include declining standards of driving, increased exposure through rising mileage. . . a significant increase in windscreen claims and, despite improvements in security systems, the upward trend in theft claims is causing concern," he said.
Campbell suggests that one way of overcoming these problems could be to assess fleet insurance cover using risk management techniques. Insurer and insured could jointly assess future claims costs, reviewing accident history, determine causes and suggest appropriate remedies for future improvement. Campbell warns, however, "If a risk management programme is set up, it is unlikely that premium discounts will be offered from the outset. Generally, insurers will continue to assess premiums based on a three-year claims analysis, but in certain cases flexibility may be exercised, influenced by the existence of the programme, particularly where there is the likelihood of continuity of insurance."