’Europe-wide price increases have diverged,’ says senior insurance industry analyst
UK personal line policyholders have seen premium increases that are far in excess of those being imposed across Europe.
That was according to the latest data from Bloomberg Intelligence (BI), which released the results of its new report on personal lines pricing across the continent.
The research found that price increases for personal lines insurance in the UK and Ireland far exceeded those in other European insurance markets, with BI adding that the data may ”indicate that the UK market is in crisis and facing much greater dislocation than other markets”.
Charles Graham, BI senior insurance industry analyst, said: “Personal lines pricing is rising faster than commercial lines, based on Axa figures, as insurers play catch up with the cumulative effects of inflation.
BI’s research found that Axa had raised personal lines pricing in the UK and Ireland by 51.7% in Q1 to try to improve the performance of its motor insurance book, while the quarter also saw Allianz increase UK pricing by 35.3%.
Graham added: ”Europe-wide price increases have diverged. The magnitude of such rate increases dwarfs the rises in Germany, France, Italy and Spain.”
Insurer focus
According to BI’s methodology, Allianz customers saw a 35.3% UK price increase in the first three months of 2024 – building on an average 18.4% price gain through 2023.
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BI said the increases had helped keep the insurer’s UK underwriting profitable. Allianz UK had a 95.5% combined ratio in Q1, higher than in Germany (93%) or France (90.3%).
Since the beginning of 2022, the combined ratio in the UK has averaged 97.4%, with France at 94.8% and Germany 91.9%. It has only exceeded 100% in one quarter in the UK.
The report explained that rate rises in Germany and France have been much lower than the UK despite similar inflationary pressures.
German rates increased 6.6% in 2023 and 7.6% in Q1. Prices in France increased 8.2% in 2023 and 9.6% in Q1.
Graham added: “The challenge for European insurers remains how to keep pricing ahead of inflation. While commercial policies may include automatic indexation on long-term contracts to reflect inflation trends, the treatment of inflation for personal lines pricing – and particularly for motor – varies by geographic region and is often dependent on individual insurers adjusting pricing in competitive markets.”
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