No surprise as insurance premiums come under pressure

Thursday, 12 October 2017
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Don’t be surprised by higher travel and other insurance premiums. UK providers are under mounting pressure from more and larger claims and bigger injury awards.

 

Insurers are reportedly paying £1 million a day in travel claims, with the rising cost of emergency medical treatment in Europe and other destinations a major contributor.

To some extent this reflects a weaker pound since the UK voted to leave the EU. But it seems other factors are also influencing the growing number of large claims.

Quoting an Association of British Insurers analysis, the trade paper International Travel and Health Insurance Journal recently reported that in 2016 there were 480,000 travel insurance claims, costing £370 million.

The major elements of this were:

  • 154,000 emergency medical cases: £199 million
  • 159,000 holiday cancellations: £130 million
  • 83,000 losses of baggage and money: £17 million.

In line with industry trends, MPI has noted increases in the number and size of travel insurance claims in recent months.

Further pressure on travel insurance premiums is likely following a change in the method of calculating compensation for personal injury claims. In travel insurance these are typically where a traveller has caused accidental bodily injury to another person.

Earlier this year, the Lord Chancellor announced that the Ogden ‘discount’ rate, on which compensation is calculated, would decrease from +2.5% to –0.75%.

This ‘inflation’ has the potential to increase awards significantly.

 

 

 

 

 

Read 871 times Last modified on Friday, 02 March 2018
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