The UK’s injury claims culture has seen motor insurance prices
grow wildly, as insurers have increased rates to recoup on claim
costs over the last 18 months.
Car insurance prices rose at an unprecedented pace in 2010, with
comprehensive policies soaring to an average value of £843,
insurance and recovery provider AA has reported.
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The group said that the annual pricing increase of 33.2 percent
was the largest it had seen since it began to monitor the market in
1994.
“A sharp growth in the number of accident management and
personal injury claims firms has helped to develop a hard-sell
system in Britain that encourages people to claim, even if they
have not suffered an injury,” comented Simon Douglas, Director of
AA’s insurance arm.
As a result of this trend, motor insurance providers have been
raising their rates since late 2009. Previously, prices had
remained stable for nearly a decade as a result of intense
competition between providers.
As a result of the increases, insurance giants such as Royal
Bank of Scotland (RBS) Aviva, RSA and Admiral may return to
underwriting profitability this year.
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By GlobalDataRBS suffered an operating loss of £253 million in the first half
of 2010 as a result of personal injury claims.
