Car insurance companies begin to close claims-income gap

Car insurance companies have finally begun to close the yawning gulf between the cost of motor car insurance claims and income collected from premium payments over the past six months, experts claim.

However, discount car insurance industry insiders said that despite the good news, insurance providers are still struggling with a depletion in their reserves due to large underwriting losses.  This has led insurance specialists to believe a premium price increase will begin by around June of 2012, though prices will not hike as precipitously as they have over the past few years.

The insurance hikes will be driven in large part by the loss of the ability to use gender differences in differentiating one motorist from another, thanks to a 2011 ruling from the European Court of Justice.  The ECJ’s decision, which will be put into effect December of this year, bans the practice on the grounds of gender inequality, despite the tendency for female drivers to get into less accidents, according to industry statistics.

Younger female drivers will be the biggest losers in this scenario, as they currently pay only 60 per cent of what their male counterparts do for insurance.  Industry experts predict a gradual increase for younger women of around 25 per cent by the end of the year as a result.

Many industry veterans are betting on the so-called ‘black box’ telematics insurance industry to step into the breach.  Based on the kind of SatNav technology that can record a car’s geographical position and speed, telematics devices keep track of a motorist’s driving habits, sending the data back to the insurer – with safe drivers reaping the benefits of less expensive insurance.

© 2018 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright notice.

What do you think?

Please note that email addresses are not visible on approved comments.