’The personal lines market, car in particular, is extraordinarily hard,’ says chief operating officer
Smaller brokers operating in the personal lines sector may choose to sell up due to finding the market “very tough” at the moment.
That was according Richard Beaven, chief operating officer at Academy Insurance, who told Insurance Times that there could be owners feeling the need to “get out” amid harder competition and increased prices.
Economic factors, such as inflation, have driven up premiums over the last year, especially in home and motor.
For example, figures published by Pearson Ham on 2 April 2024 revealed that the average price of home policies were recorded at £400 in Q1 2024, 10% higher than the previous quarter.
The figure is also an increase of almost 41% compared to a year ago, which the pricing specialist said was the “highest escalation” in pricing since 2019.
Over in the motor sector, while data from Confused.com and WTW showed prices fell 5% over the last three months, premiums are still much higher than a year ago.
Published on 18 April 2024, the two firms’ index showed that there was an annual rise of 43% (£284) from Q1 2023 to Q1 2024.
“Brokers who have personal lines books mainly are finding it very tough indeed,” Beaven said.
“The personal lines market, car in particular, is extraordinarily hard. Competition is hard, the pricing of personal lines car and home has gone through the roof.
“So, customers are really shopping around a lot more, [with them] very upset about price increases.”
“Brokers simply can’t deal with a 100% price increase [for example].”
Insurer view
In turn, Beaven said there could be owners of smaller brokers thinking that they “need to get out before they don’t have any business because it’s gone somewhere else”.
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In an interview with Biba back in November 2023, Sue Coffey, personal lines director at Covéa Insurance, explained that finding a price that was acceptable to customers “is not easy”.
“I think having a strong offering for their customers – first they must be able to place the risk and second, they must do it competitively. It’s really tricky for them right now because prices have gone up so much,” she said.
And when asked what Covéa was doing to help brokers with this, she explained: “We’re trying to ensure we remain a market for brokers in a way that’s sustainable.
“To do this, we need to charge the right rate for the risk, using data that’s up to the minute and really accurate. That’s why we’re continuing to invest in data and IHP and we’re really keen to work with brokers who have their own data that we can use to enhance the accuracy of our pricing for them.
“We’re not compromising on offering products with value and we’re not cutting costs to the detriment of customers. We know we must deliver on our promise and be there when the customer needs us.”
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
He took up the position of deputy news editor at Insurance Times in March 2023, before being promoted to his current role in May 2024.View full Profile
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