Interim management and AGM statement shows competitive motor market and challenges to growth.
Highway Insurance says trading conditions have been difficult in the first months of 2008 and the UK motor insurance market remains competitive.
In its interim management and annual general meeting statement, the personal lines insurance group said that although insurers in the broker market continued to introduce price increases, there was little evidence that these were passed on to the consumer.
It also said March brought unwelcome price reductions from a small number of direct insurers who have reduced their prices by up to 5%. Against this backdrop, Highway said it had average premium rate increases of 2.9% for private car comprehensive and 2% non-comprehensive.
For commercial vehicle, it upped its comprehensive by 3.3% and non-comprehensive by 1.6%. Fleets and motorcycle premium rates were largely unchanged.
“As always, we will seek to maintain underwriting discipline and will not chase volume at the expense of our loss ratio,” the statement said. “Consequently, we are currently budgeting gross written premium to end the year at a similar level to that achieved in 2007.”
But it added that its strong balance sheet, reserves and cash flow, as well as a significant solvency capital surplus, should see it well placed for future prospects.
No significant change was reported in claims inflation trends, where it said credit hire and personal injury awards continue to be the main drivers, was reported. The other heads of claim continue to be well controlled. Accident volumes in the first quarter of 2008 were slightly down on 2007.
In distribution, it said UK personal lines continued to develop towards the internet and the price comparison sites. The pace of change has accelerated during the quarter as the aggregators have increased their spending on television and press advertising.
Highway’s distribution business, Hero, has continued to build its internet presence and has increased its policy count to 238,000. Renewal rights to a further 34,000 from BGL are due in July.
