The automotive market has experienced extreme disruption over the past three years. It is positive to see stability return in 2023, and rates in this class are stable. Claims inflation causes some concern for underwriters, particularly having regard to the cost of parts and labour.
In assessing premium, underwriters will have regard to:
- Loss history (with regard particularly to frequency of claims, excess held and net claim payable).
- Assessment of fleet (size, value of vehicles and types of vehicles).
For larger fleet programmes, our clients should have regard to the following:
Policy limits and basis of settlement conditions
Avoid underinsurance: are vehicles insured at market or agreed value? Agreed value policies have traditionally attracted higher premiums as they provide certainty relating to payouts (considering year on year vehicle depreciation) however, do note that policyholders have been left out of pocket with their market value policies due to rising inflation pressures and high demand of used cars driving up the purchase price of second-hand vehicles.
Assess excess structures
Setting internal procedures and having adequate funds to manage small or non-complex accidents. Higher excesses yield premium savings for policyholders.
Risk management
In assessing premium, underwriters will have regard to:
- Driver training and risk assessment programs: Educating drivers on the risks of collisions, identify high risk drivers, and overall suggest strategies to protect fleet assets.
- New technology: Telematics and dashcams being introduced to vehicles reducing risk exposure and collecting evidence to aid in claim recoveries.
Continue reading our full range of market updates here:
July 2023 Market Update Overview
For more in depth market updates by product class, profession and industry, please see our individual reports below:
General Insurance
Financial Lines
- Professional Indemnity
- Directors’ & Officers’ Liability (Public companies)
- Management Liability (Privately held and smaller companies)
- Cyber Liability
Construction