Aviva's McMillan: motor rates should keep rising

Despite talks of falling personal lines motor rates, there is still enough pain in the market to keep them high, according to Aviva UK general insurance chief executive David McMillan.

Aviva has achieved personal lines motor rate increases of 18% over the last year, according to the nine-month results it released today. McMillan said this level was slightly ahead of industry wide claims inflation figures, but added that the industry had been playing catch-up following three to five years of “rampant” bodily injury claims inflation.

“There is a lot of talk about whether we have reached the peak of the cycle in motor. We have still got a lot of headwinds in terms of claims inflation,” McMillan said. “We are not really seeing any particular dent in some of the claims farming trends. We have still got the potential for a ruling on Ogden. Although momentum in rates is perhaps slowing a bit, there are still quite a lot of forces on the claims line that will make insurers want to make sure they respond on rating.”

Aviva’s new aggregator motor product, quotemehappy.com, has started bringing in 10,000 policies a month, according to McMillan. The product is currently available on Gocompare, but Aviva has plans to roll it out on the other three main aggregators in the coming months.

““We would hope to be up and running on the major aggregators by the beginning of next year,” McMillan said.