Brokers claim NIG rates being hiked by up to 300%

As the winding up of NIG’s personal lines business continues, brokers claim that rates are being hiked in renewals still being offered.

Insurance Times spoke to a range of brokers, all of whick agreed rates for personal lines, especially motor, had increased drastically.

Although NIG rejects the suggestions of renewal hikes, the NIG wind-down continues to leave a bitter taste in the mouth for many brokers, which will raise questions over how supportive they will be towards the commercial arm.

Topaz Insurance services director Richard Mikula said: “There is no underwriting philosophy there, it is just pick a figure out and send a renewal out.

“I have run them, and they say there’s no underwriting concessions at all. They have pre-emptied renewals by putting in any wild figure to get rid off it quicker.”

Priced to be uncompetitive

Topaz said one motor quote for 2009-2010 had a premium renewal of £539.73. No circumstances have changed, but the renewal quote is now £1,790.92.

Another motor quote was £460 last year, no circumstances have changed, and the price for renewal at £1,444.08.

Mikula says the high quotes means he has to find another insurer, in a short space of time.

David Harvey, managing director of Barry Grainger Ltd, said he had seen quote rises of up to 300%. He said: “They are pricing themselves to be uncompetitive.”

Another broker, who did not want to be named, agreed renewals were very high on most, but not all, the personal lines business.

Bodily injury strikes again

NIG rejects the claims, but admits some motor business has risen.

A spokesman said: "Without providing us with the specific policy details, it is difficult for us to comment on the examples quoted.

“The examples given are not typical of the increases we have introduced. However, as publicised by various organisations, car insurance premiums have risen substantially over the past 12 months due to factors such as increasing bodily injury claims.

“Furthermore, in any year our rating factors will change according to our prediction of risk. All of these factors could have a significant impact on the premium without the policyholder’s details changing."

Run-off time

Mikula said the wind-down process of personal lines would seriously affect his decisions to place business commercially.

Another broker told Insurance Times he was relaxed about NIG’s commercial business, and if the price and conditions were right, he would not hesitate to use them.

So, although some brokers remain relaxed, there are still many brokers that feel aggrieved, and the latest allegations of rate hiking will not have helped. For NIG, the sooner the personal lines book goes into run-off, the better.