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The GAA confirms the tightening of the market in motor insurance

by

Andrea Lubeck

October 11, 2018 09:30

The Groupement des assureurs automobiles (GAA) confirms the tightening of the market, and imputes the increase in average premiums in motor insurance in this situation. Since 2015, the average premium paid for a passenger car has increased by 6 %, from $ 532 $ 564 per cent in 2017.

In addition, the average cost of claims has also increased, according to data cited by the GAA. In 2015, it was $ 3 062 $ and is past 3,301 $ in 2017, representing a growth of 8 %.

The ratio of loss, which must be kept to $ 0.70 on average for insurers to be cost-effective above this threshold from 2015. In 2017, it has reached 0,77 $. “If we add the operating costs, the total cost assumed by the insurers exceeds the premiums paid since 2015,” says Michel Ladéroute, deputy director general of the agency.

Rising costs of repairs

The GAA assigns the tightening of the market to several factors, including the increase in the use of devices to aid the conduct of more and more sophisticated and on a larger number of models.

“All of these electronic components have increased the cost of the repairs. And this is not to mention the increase in the cost of parts and labor that continues year after year, ” says the group.

Strong competition

Also, the strong competition on the market has led insurers to maintain or even reduce the amount of required premiums ” for several years, despite an increase in their costs of claims and their costs of operation “. Since 2015, the market is in adjustment, resulting in an increase of the average premium of about 2 % per year.

“Despite this annual increase, the average premium of the 2017 matches in current dollars to that which prevailed in 2008,” adds Mr. Ladéroute.

The GAA also indicates that the level of premiums charged over the last few years is not sufficient to cover the total cost of claims and operating expenses of the insurers.

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