Motor insurers will use virus windfall to cut premiums for good PR, says Moody’s
Retail insurers will use windfall gains from the coronavirus pandemic to keep motor premiums down next year to restore the sector’s reputation, according to a report by ratings agency Moody’s.
Traffic volumes slumped during lockdown by more than 70 per cent, as cars went unused while their owners stayed at home. The Moody’s researchers highlighted that this will lead to windfall profits for many European motor insurance companies, due to lower than usual claims.
For example, MAIF in France reported an 80 per cent decrease in the frequency of its motor claims for the second half of March, the report states, while its rival Matmut saw a decline of up to 70 per cent. Moody’s says those declines are likely to be replicated across Europe.
It said that retail insurers are therefore coming under increasing pressure from politicians and the media to pass on any windfall gains from the pandemic.
Five of the biggest Irish insurers, including Allianz, Axa, FBD, RSA and Zurich, already agreed at the height of the pandemic in April to give rebates to customers.
The payments were generally only about €30 per policy, however, and were distributed in many cases in the form of gift vouchers.
Article Source: click here.