Accountancy firm Deloitte recently announced that car insurance companies sustained as much as £2 billion in losses in 2010, which has led the majority of providers to increase their premiums as they attempt to regain some ground from the crippling financial losses. Insurance experts estimate that 120 pence was paid out to motorists who made claims on their car insurance premiums for every 100 pence an insurance provider received in premium payments in the UK last year.
A dramatic and significant increase in motor insurance claims in 2010 has led to the lion’s share of car insurance firms incurring a loss the previous year. This is in spite of even discount car insurance premiums increasing by an average of 10 per cent in the UK on a yearly basis.
What this means for motorists is that many more insurers will be looking to hike their car insurance rates even more than they have in an effort to try and recover at least a portion of these losses. Even if insurers do raise their rates (which industry experts agree is an inevitability), insurance insiders estimate that the majority of these insurance providers will not be back into the black until 2012 at the earliest.
As the AA has recently announced that car insurance policies on new vehicles in the UK are predicted to increase by as much as 30 per cent in some cases, this new revelation is most likely going to place even more pressure on British motorists in the coming months, experts say.