MPs to scrutinise insurers over conduct
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The Treasury Committee is to investigate how insurers have treated consumers since the pandemic, following anecdotal evidence of premiums rising faster than inflation, insurers refusing to pay out and difficulties in making claims.
Three insurance representatives are invited to an evidence session on 7 June: Doug Brown, chief executive for UK and Ireland life at Aviva; Charlotte Clark, director of regulation at the Association of British Insurers and Christina Nestares, CEO of Admiral UK.
The Committee is also asking the public to submit questions to the insurance industry ahead of the evidence session.
MPs want to explore the impact of inflation on insurance premiums, the conduct of insurers when handling claims and the size of insurance payouts. They are also likely to examine whether firms are making excess profits, competitiveness within the industry and the regulatory environment.
Harriett Baldwin, chair of the Treasury Committee, said: “Insurers provide a vital service, protecting our most prized possessions from theft, loss and damage. However, we’ve heard anecdotal evidence in recent months of premiums rising faster than inflation, insurers refusing to pay out, and difficulties in making claims.”
The Conservative MP for West Worcestershire added: “As a committee, we’d like to hear from consumers on their experiences of the insurance industry since the pandemic. We’ll use these to inform our evidence session on the health and competitiveness of the insurance market with industry bosses next month.”
Consumers are invited to tweet @CommonsTreasury with the hashtag #AskInsurers to submit their thoughts and questions. The Committee will analyse the responses to identify themes to inform its work.
Admiral reported a pre-tax profit of £469m in 2022, presenting a 39% drop from the 2021 year-end, mainly due to increased claims and the cost of servicing those claims.
On Wednesday, Aviva reported £1.3bn premiums for its general insurance business in the first quarter of the year, 11% higher than Q1 2022. Group CEO Amanda Blanc said it was due to “disciplined management” in response to inflationary pressures.
Research by the ABI found that despite surges in weather-related claims and more expensive building materials, the average price of combined home buildings and contents insurance rose by less than the rate of inflation over the last year.
According to the trade body’s Home Insurance Premium Tracker, the average price paid for home insurance in Q1 this year was £315, up 6% from the same quarter last year. The latest UK inflation rose by 8.7% in the 12 months to April 2023, down from 10.1% in March.
Is inflation pushing insurers to increase premiums faster than they should?
