Premiums of car insurers will rise up to 40 per cent if it doesn’t be investigated
Car insurance is being investigated by the UK’s competition watchdog at the centre of a new investigation for assessing whether insurance firms are increasing premiums unnecessarily. Yesterday, The Office of Fair Trading explained that it was so cared at signs that premiums would rise up to 40 per cent in the year to March, which it issued a call for evidence finding out the reasons for the hikes.
The Association of British Insurers had said that the industry never changed a profit for 16 years as claims, particularly personal injury claims from car accidents, which had increased faster than premiums. The OFT would look at the sale of ancillary products such as protected no claims bonuses, the use of price comparison websites, and the use of replacement vehicles.
However, it would not investigate either the referral fees, which was paid to insurers for customer data, or inflation of personal injury claim costs because it was the reason for the rise in premiums. Collins Stewart analyst Ben Cohen said that Motor was one of the most competitive markets in the world so it was unlikely consumers were suffering because of limited competition.
Shares in insurer Admiral go down 2.4 per cent on fears it could suffer because its comparison site confused.com and its reliance on ancillary revenues.