The term windfall can mean a number of different things. From a frugivorous point of view, its most obvious association is with things that fall out of trees but which – even if a trifle bruised and perhaps a bit manky round the edges – still look good enough to eat. If you are Canadian – and pray God you are not – the word can mean a desolate patch of land littered with trees felled by high winds. It can also mean a fortuitous spot of good luck, from which there are benefits – frequently of a financial nature – to be reaped.

Which of these definitions leading global professional services company Towels Watson had in mind when pronouncing this week that “Rates drop as motor insurers anticipate legal reform windfall” Bankstone News is at a loss to say. Perhaps it was the trees one. Perhaps not. Perhaps it doesn’t really matter. Especially not in the bewildering context a press release that describes Twickenham as ‘trendy’.

The point is that, as previously reported in Bankstone News, motor insurers are literally tripping over one another in an attempt to under-price all possible rivals out of the soon-to-be-insanely-lucrative PI-free motor insurance market. The net result, accordingly to the snappily named Watson Car Insurance Price Index (CTWCIPI), is that comprehensive rates have fallen by almost 8% in the second quarter of 2013 and by around 15% in the past year.

The CTWCIPI also apparently shows that after all that fuss about the Eeeuw Gander Directive, discrepancies between males and females have now been more or less ironed out (presumably by the latter).

Young men initially benefitted massively from the Eeeuw’s intervention, with 17-20 year old male drivers seeing premiums fall back by over 30% in the last 12 months following two quarters of steep increases introduced by canny motor insurers in anticipation (possibly a theme here?) of the Gander Directive.

Young women have now “enjoyed quarterly price cuts of 11.6%”, which according to the grammatically compromised formulation of Towels W, “was comparable to those of young men.”   

But with all this rate slashing, insurers had better be pretty confident that the combination of LASBO and the War on Whiplash really will stop people claiming for things like personal injury – or there’s a real risk that motor insurance might not turn out to be wildly profitable after all. Again.

As Don Cananderson, Towels W’s Global Hen of Pricing and Product Management, puts it: “The early signs from the MOJ portal since April are that there will be a reduction in personal injury cases, but the rate changes seen in the last quarter still represent rather an optimistic outlook from insurers.”

Of course they’re optimistic – that’s why they’re writing motor business! Duh!



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