Norwich Union: Insurance industry must raise prices

www.moneynews.co.uk > Insurance > Norwich Union: Insurance industry must raise prices

Norwich Union: Insurance industry must raise prices

Tue 19th Dec 2006

Following a decision by Royal Bank of Scotland Insurance to raise its interest rates, a spokesperson for Norwich Union has said that the insurance industry is losing money and as a result must raise premiums.

Since September, Bank of Scotland has raised the cost of insurance by five per cent and it is the latest among a host of large insurance providers who have increased premiums, such as Norwich Union, who has raised premiums by an average of 16 per cent in the last few months.

Once Norwich Union moved to raise its prices, many other insurers followed suit and Royal Bank of Scotland Insurance maintains that the increases are necessary due to the fact that claim settlements were costing more than the amount brought in by premiums.

Erik Nelson, spokesperson for Norwich Union, said: "Insurers are a business and any business needs a profit and on the motor side of the business we are not making any profit and haven't for some years. In those terms you could say the customer has been getting almost too good a deal for too long. This growth has not been sustainable. Things needed to change."

Mr Nelson went on to state that Norwich Union is losing ten per cent of all premiums that the company is securing and said it was inevitable that one of the larger insurers would raise prices at some point.

Related News : Insurance
	Under-insurance 'a costly mistake for Brits'
	Rodents and pests 'causing havoc for homeowners'
	Brits 'should be aware of home cover details'
	PPI scandal 'has helped tighten financial regulation'
	Location 'can impact home insurance costs for Brits'
	FSA and CC 'failed to tackle PPI issue head-on'
	Pet cover 'important for Brits to get right'
	UK homes are 'falling into disrepair'
	Brits advised on reducing home insurance cost
	UK insurance 'has become more complex'

Related News : Aviva
	Over-55s don't believe in paying for care, reveals Aviva
	Aviva reports substantial payouts for life insurance customers
	Aviva revamps People and Places insurance products
	Fixed-term retirement plan launched by Aviva
	Aviva uncovers pensions calculator 'contradiction'
	Aviva finds grandparents could be financially worse off due to babysitting
	Aviva retirement calculator research 'concerning'
	Planning is key to retirement calculator, says Aviva
	Retirement calculators users nervous, suggests Aviva
	Pensions calculator recommendation offered by Aviva