Citing concerns that the motor car insurance market has become ‘dysfunctional,’ one of the car insurance companies under the More Th>n aegis has reduced their motor premiums by 17 per cent, it was recently reported.
RSA says that it has taken steps to reduce its market share in the face of market dysfunction such as an increase of spurious whiplash claims, cash-for-crash fraudsters, and the advent of car insurance comparison sites, all of which have impacted the insurer’s profitability in a negative manner.
The firm raised its rates and also chose to walk away from business with low margins as a result of these concerns, said Simon Lee, chief executive for RSA. The motor insurance market is in serious need of reform, Mr Lee added, remarking that his firm has chosen to focus on more profitable UK markets such as household and pet insurance, where premiums increased by 7 per cent and 11 per cent respectively during 2012’s first quarter.
The insurer has already reaped the benefits of two deals – one with Argos for pet insurance and another with Home Retail Group, who owns the recently launched Homebase brand. RSA is also poised to begin providing pet and home insurance for the John Lewis Partnership.
UK personal business premiums had declined by 2 per cent for RSA, to a figure of £330 million, but the group saw an overall net increase in written premiums to £2.2 billion. The primary driver of these new figures was attributed to emerging market growth in regions such as Latin America.