Aviva warns of soaring insurance fees despite 21% boost in profits
Consumers are facing soaring car and home insurance premiums as two major insurance carriers, Aviva and RSA, increase the value of cover and warn of further rises to come.
Aviva, Britain’s biggest insurer, said today it had imposed “double-digit” increases in motor premiums over the past a few months while increasing home owners insurance rates.
David McMillan, head of Aviva UK general insurance, said: “It will not be surprising that rates have continued to harden this season. For those who think about the underlying inflation in bodily injury claims we have been on pertaining to one more 3-4 years, in many respects it truly is surprising rates didn’t harden sooner.”
He added: “There is no signal of a let-up in this particular inflation, therefore i expect this market phenomenon to keep at it.”
RSA, which owns the greater Than insurance brand, has raised its rates by 13% for motor policies and 4% for home cover. It said it “continues to do this on rates whenever necessary”.
Fierce competition led many insurers to slash premiums in recent times, but rates are now rising again about what that is a regards weight loss normal levels. A clear, crisp surge in claim costs could be the major reason.
“Motor insurance policy is simply a charity. The insurers are losing so much money and therefore are aiming to get up to date. For every single 1 in the door 115p fades the entrance,” said Panmure Gordon analyst Barrie Cornes.
Fraud is helping push vehicle insurance premiums up within their fastest rate on record, as per the AA’s latest British insurance premium index. Between April and June, premiums rocketed by a lot more than 11%, the biggest increase since survey started 16 years in the past. AA president Edmund King has blamed a “21st century wave” of innovative fraudulent behaviour, for example providing falsehoods and claiming for non-existent personal injuries, for any rise.
Aviva received an advert boost through the high-profile TV ad campaign featuring comedian Paul Whitehouse. The group gained 100,000 more vehicle insurance customers in the first half of the entire year. Advertising is said and to have benefited its annuities business.
Aviva raised its half-year dividend by 6% to 9.5p a share after slashing it by in regards to a third recently. It reported a 21% surge in operating profits to 1.27bn, as sales of long-term savings products rose 4% to more than 20bn. The UK life and pensions business achieved record profits of 728m, with sales up 10%. General insurance returned to growth, with net written premiums rising 7% weighed against another one half of 2009.
Aviva has shifted its business faraway from investment products towards pensions and life policies, that are more resilient much more economic trouble. The insurer wishes to gain benefit from the $1.7tn sum estimated to get purchased life policies and pensions in england and Europe, the biggest market, in the next 5 years.
City analysts described the effects as “sparkling”, and Aviva shares jumped a lot more than 7%, or 26.4p, to 394.3p.
