Uncertainty hangs over UK motor market, says Towers Watson

12-04-2012

While results for the UK motor market in Q4 2011 showed the cost of comprehensive cover fell by 3.3 percent, there is still much uncertainty in the market.

This is the opinion of Rory O'Brien, Towers Watson's global head of risk consulting and software business.

"The fall in prices may reflect a combination of factors, including continuing competitive pressures, reductions in underlying mileage exposures," he says. 

"Other issues could include petrol prices and other macro-economic effects, along with insurers and intermediaries improving their counter-fraud capabilities."

O'Brien adds that there remains considerable uncertainty, particularly around personal injury claims costs in the medium term and factors affecting these will be key influences on the future trends of price changes. 

"These factors would include, for example, any review by the Lord Chancellor of the Ogden discount rate, any changes to referral fees or to the fixed legal fee amounts payable within the Ministry of Justice portal claims process, insurer attitudes towards periodic payment orders, and developments in the claim management company sector," he says. 

"The requirement for gender-neutral pricing from December 2012 may introduce a discontinuity in price trends for some market segments."


UK, Towers Watson, Automotive, Car insurance

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