Insurers are inconsistent in how they treat drivers with motoring convictions
Swinton’s move to slash premiums for drivers with points on their licence may not mean wholesale changes in the marketplace, but it has raised the question of how points factor into the motor premium equation.
While larger insurers agree that points do impact on premiums, there is little consistency on the extent to which it does and why.
What is clear is that insurers have been responding to the issue of escalating convictions – and escalating points – long before Swinton’s announcement.
Royal & SunAlliance has said that drivers with speeding convictions tend to have more claims than those with clean licences, and set their premiums accordingly. This view is echoed by other insurers including Royal Banks of Scotland, Allianz and CIS, which says that premiums would typically increase by 5% for a first offence, and between 15-25% for a second.
Norwich Union, on the other hand, says that they do not penalise drivers with points on their licence as a matter of course, emphasising that it is of more concern if a driver has picked up several convictions in a short space of time.
RBS points out that there is a risk of simplifying the problem by holding too much stock in points, as they can be accrued for a variety of offences, some of which represent higher risk than others. This includes driving whilst using a mobile phone.
Meanwhile Zurich says that, although it evaluates premiums based upon both what was happening in the real world and in the marketplace, it would not be following Swinton’s example.
Swinton maintains that it takes more factors into account than a typical insurer when assessing premium, and as a result its rates are both competitive and profitable.
Ultimately, though, as a spokesman for the ABI said:
"The question insurers must ask is the risk of speeding changing due to the proliferation of penalty points? If it is, then premiums will have to change, too."
