19 February 2007
The Royal Bank of Scotland (RBS), which owns car insurance companies Churchill, Privilege and Direct Line among others, has announced that it is to raise its premiums.
This is continues the run of bad news for consumers, as just four months ago Norwich Union admitted that it had increased its prices by 40%, with the Admiral Group admitting to the Mail on Sunday that they too would be forced to up its prices if the RBS increases go ahead.
Henry Stevens, director of underwriting at the Admiral Group, whose brands include elephant.co.uk and Diamond as well as Admiral, commented that if RBS did increase its premiums, Admiral would have no choice but to follow suit to prevent it being swamped by a lot of poor quality, high-risk and costly customers.
"We believe Royal Bank of Scotland Insurance is the decisive factor in taking the market up in price," he told the newspaper.
"If it were to sustain a series of increases over the next 12 to 18 months, that would take rates up substantially."RBS Insurance responded by stating that it was compelled to increase its premiums because for the past four years the cost of claims had outstripped revenue from premiums.
There was one positive from these developments however, with Ian Crowder, a spokesman for AA Insurance, commenting that the increases would force the industry to become more competitive in other areas.
"You will find people will shop around even more now. The market is going to be even more polarised between the highest and lowest prices," he said.
The cost of car insurance varies widely but you can still get yourself a good deal. Read our tips on finding cheap car insurance and use uSwitch.com's impartial service to compare providers and switch online. No need to give your details out time and again – our service is easy and free to use. Compare car insurance today.
© 2008 Adfero Ltd
Content for the uSwitch.com market news service is provided by a third party, Adfero Ltd. Whilst uSwitch.com makes reasonable efforts to check the reliability of this content, uSwitch.com does not guarantee the accuracy thereof or endorse the views or opinions given by Adfero Ltd, unless expressly stated otherwise.