Record profits and plummeting rates – is the nightmare over?

Van insurance news roundup: 7 days ending 1 Nov 2013:

With one of the largest van insurance providers in the UK posting record dividends and premium prices dropping, is our long national nightmare finally over?

I wouldn’t believe it unless I’d read it myself, but apparently it’s true. Autonet, one of the largest commercial van insurance providers in the UK, has posted enough profits this year that it will issue a massive dividend of £11 million.

Of course, 78 per cent of that cash will go straight to Glynn Keeling, who owns a massive controlling share of Autonet. That’s largely irrelevant, though – what’s really important is that the insurance provider turned an amazing profit of £8.6 million before tax, up from £7.6 million last year. That’s some increase!

It looks like this performance really gives the lie to the whole complaint put forth by insurers that they’re barely turning a profit. Car insurance companies have been using that little nugget for years to justify their high premiums, but it’s obviously untrue for Autonet at least.

So massive profits are good for the industry, right? You would think that this means insurers don’t need to charge as much. Normally I’d dismiss that as the kind of dewy-eyed optimism that gets you taken advantage of, but lo and behold another news story breaking this week confirmed it – insurance costs are down by an impressive margin.

In fact, average costs for an insurance policy have plummeted to their lowest point in more than twenty years. Not for nothing but that’s incredible, especially in this market where insurers love charging as much as they can get away with.

So what’s behind the drop in costs? Most experts point to new blood flowing into the industry in the form of high levels of competition, which I can only hope will be here to stay. It’s obviously working, especially if insurers like Autonet are performing so amazingly well that they’re issuing huge dividends.

Let’s hope this situation lasts for a long, long time. Motorists have been suffering under high insurance costs for far too long, and this is a pleasant change. For what it’s worth, it seems like a win-win scenario to me: insurers are in the black and drivers aren’t out an arm and a limb when it comes to purchasing cover for their vehicles!

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