Car insurance premiums could rise
With Australian consumers already feeling the pinch, a survey from JP Morgan and a consultancy firm Taylor Fry suggests that car owners are set to feel the pinch in the coming months with premiums predicted to rise considerably.
The study suggest high claims payouts and stiff competition in the car insurance market, as well as a lack of returns on the investment front will lead the major car insurers to seek to increase their bottom line by charging higher premiums.
Premiums for insurance in 2015 were relatively stable as insurers sought customers, but this is expected to change considerably in the coming year as they seek to increase the bottom line.
"The last two years in motor were pretty soft. A big part of it is competition," Siddharth Parameswaran, senior insurance analyst, at JP Morgan, told the Sydney Morning Herald when talking about the slated rise in premium prices. "These rate reductions in 2015 I think were in response to try and solidify market share, and prices have come back a fair way."
"Given the tough profit trends in 2015, we're seeing consistency in the key concerns from underwriters, with the top issues remaining the same as last year – competition, rates and capacity," Taylor Fry principal Kevin Gomes said. "In addition to the pressure from events, profitability has also been impacted by rate pressures, particularly in commercial classes but we're looking at positive developments in both domestic and commercial classes for the coming year."
An increase in car insurance premiums would provide significant hurt for consumers who already have to cope with the prospect of a 5.59 per cent increase in private health insurance premiums from April 1 this year.
It’s increasingly important for consumers to be wary when choosing their policy.
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