There’s never been a better time to buy motor insurance! Not for a couple of years, anyway. However much they deny it, motor insurers dazzled by the prospect of a claims-free environment post-LASBO are cutting motor rates like there’s no tomorrow.
The latest research from confuse.com and Towels Watson revealed this week that the average UK motor premium has fallen 13.9% over the last 12 months. At these prices, you’d be crazy not to buy – unless you’re female, in which case you might feel mildly peeved, as lady motor premiums have been edging up following implementation of the EeeUw’s Gander Directive.
For Towels’ Steve Jones, however, LESPO fever may not be at the root of price slashing after all. “There’s a view that this is just a traditional price war, but LAPSO is a convenient thing to point to.”
So what can motor insurers do ensure they do not over-compete one another into oblivion? The key to ensuring the sustainability of rate reductions off the back of the LAPSO reforms, Jones reckons, “is to cut rates in the right areas”.
“A lot of the discussion around LASPO,” he told Insurance Times this week, “has focused on the effect on overall average premiums. What’s differentiating insurers at the moment is their ability to make the correct segmental price changes for LASPO,” he said, pointing conveniently to LASBO.
So now you know!
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