FURTHER PREMIUM INCREASES

Insurance companies are confident that rates in both personal and commercial insurances will continue to rise in 2001.

All the major UK insurance giants are agreed that writing for profits would be one of the top priorities for the new year. Most insurers are re-writing their commercial books at higher rates than seen for many years. Great competition and a soft market throughout much of the 1990’s has made way now for a much more realistic approach to underwriting and a take it or leave it attitude has become more of the norm.

Employers, Public and Products Liability Insurance is continuing to see the greatest increases, with premiums often doubling even where there has been a good claims experience. New legislation in terms of Ogden, Woolf and NHS claw-back have put further pressure on the reserves and claims are rising in both cost and frequency. The increasing number of "No Win No Fee" accident claim companies is also having a major affect on the number of small claims rising which are often not worth defending purely on economic grounds.

Private and motor fleet insurance has seen dramatic increases this year of around 25% and is expected to continue to rise next year with further power for the NHS Claw-back legislation where the capped limit of £10,000 is to be abolished.

A senior spokesman for one of the main insurers stated "We are in the business of making a profit. We are re-writing our portfolio and pushing through rate increases. Law changes and compensation payouts are going to have a pretty dramatic effect on our industry"