Motor Insurance Market Update: January 2025

Motor Market Update
Tessa Zaikos - Bellrock Advisory

Tessa Zaikos

The motor insurance market is evolving to keep up to date with new technologies such as electric vehicles (EV’s) and advanced driver assistance systems. As these technologies become more commonplace, insurers are updating policy wordings and definitions to reflect the ever-evolving risks associated with these advancements. For example, EV’s have a significantly more expensive rate per unit cost than standard vehicles, contributing to continued premium increases and volatile claims performance. 

Motor vehicle premium costs are primarily driven by factors such as fleet size, claims performance and the rising costs of vehicle maintenance and repairs. Couple this with social inflation and supply chain disruption and it’s clear to see why there is ongoing pressure on insurer pricing. The increasing use of artificial intelligence (AI) and advancements in vehicle technology have also contributed to higher claims settlement costs. 

For policyholders experiencing deteriorating claims performance, rate increases of up to 10 per cent are possible, depending on the risk type and fleet size. Businesses may mitigate premium increases by opting for a higher retention or excess structure, but they must be prepared to manage and fund claims which fall under the insurer’s deductible. 

To manage risk and potentially reduce premiums, businesses should implement strong risk management practices. Vehicle accidents can expose companies to liability risks, legal costs, delays and productivity losses. Effective strategies to reduce these risks include implementing telematics, providing driver safety training and educational programmes, and establishing a driver qualification system to ensure drivers have adequate necessary experience and clean driving records.

To optimise your motor fleet coverage and implement effective risk management strategies, contact your Bellrock Advisor.

 


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