A shift in strategy
Despite the rise in private car insurance rates throughout 2010, Tom Cooper reveals some brands are slipping back to a volume-based approach.
The relentless surge back towards profitability for private car insurance has continued unabated in the last quarter, with a 6% increase in best price coming through across 500 quotes. This takes the rise to
27.5% in 2010 to date — having not moved at all through 2009. However, the rate of increase has slowed and signs are emerging of a few brands breaking ranks and starting to move back towards a volume-based strategy in certain segments. This has been led by RSA’s new E-Choice brand, which in its start-up quarter has immediately become the brand that is cheapest most often — followed by Hastings, Sheilas’ Wheels, Esure, Admiral, Octagon, LV and 1st Central as direct writers dominate. Somewhat worryingly, 29% of our risk sample actually showed a decrease in price during the last quarter. In this eighth price comparison watch, with pricing segmentation in mind and rate increases continuing to prevail, iGO4 dropped down a level and identified which segments have been hardest hit. It is clear that young drivers are feeling the real brunt of the nervousness of underwriters; the increase for males in their 20s was 8.35%, and this has been compounded by the ongoing uncertainty surrounding Quinn.
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*Taken from the Post Magazine October 2010