FITCH: rising claims costs are challenging UK motor insurers

UK motor insurers' profit margins will remain under pressure as insurers struggle to increase premium rates to keep pace with rising claim costs, Fitch Ratings says in a new report. It is difficult to put up prices without losing business as the market is highly competitive and price-sensitive in the UK.

However, several insurers emphasized their focus on defending profitability rather than market share, when recently unveiling their 2018 results. Prioritizing market share at the expense of profitability could lead to rating downgrades.

Costs for theft claims have surged in recent years due to a steep increase in car theft and the average settlement cost. The number of vehicles stolen from April 2017 to March 2018 was up by 49% compared with the corresponding period four years earlier, according to Home Office data, and the average settlement for theft claims rose to well over GBP6,000 last year, compared with less than GBP4,000 in 2013, according to data from the Association of British Insurers.



See the full report here.

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