Premium reductions in the Acturis Insurance Price Index for small business’ commercial vehicles broke the mould when figures were released last week.
Whilst other sectors demonstrated stability, it was the white van man who’s benefited in the first quarter of this year.
Premiums have dropped 10%, the greatest single fall since BIBA/Acturis began tracking such statistics.
When summarising what made the change so dramatic, Graeme Trudgill believes it’s the brokers doing the heavy lifting. Graeme, the Executive Director of the British Insurer’s Broker Association, was keen to underline the part BIBA’s members played in helping to force van insurance prices down.
The two major aspects he identified that have helped achieve the record drop are:
- the attitude of brokers towards customers, as a result (or because of) increased competition;
- vehicle insurance reforms, whose combined implementation over recent years is now bearing fruit.
One could argue that the first point is a case of do or die. With the rise of the comparison website, commercial vehicle insurers for the small business owner have had to up their game.
While some websites can be soulless, if they’re returning competitive quotes then brokers must find their human voice to connect with customers when they get the opportunity. So, yes; that part’s working well.
Legal reforms are the real drivers of change
But it’s the vehicle reforms to which Graeme refers that are really helping to drive prices down. Since Continuous Insurance Enforcement was introduced almost four years ago, the MIB attest to a 40% reduction in uninsured drivers.
This figure has since been widely adopted as the benchmark for the law’s impact on the market. Having to have a vehicle insured at all times has massively reduced the payouts insurers have had to make following accidents involving one party driving without cover.
The second, and more recent, catalyst instigating lower premiums is the crackdown on personal injury claims.
The coalition’s banning of incentives for ‘victim’ referrals is working. Those referrals drove the compensation culture that had the opposite effect of the market forces we see reducing premium costs today.
Putting the skids under whiplash and soft tissue crash damage is paying dividends across the spectrum of motor insurance. It’s too early to say the spectre of whiplash has gone, but we’re at least moving in the right direction.
How does the reduction in van cover compare to other markets?
For big business, there’s nothing like the drop in insurance premiums that their smaller peers are enjoying. Large commercial fleets have, in fact, seen a small rise in the price of the average policy, up 0.6%.
For the individual motorist, they continue to see reductions in premiums. But the latest drop, 0.9%, is the smallest in almost three years.
Again, these are signs that the market is stabilising in the domestic, as well as commercial fleet markets. With stability forecast all round and bartering for market share done, there really is no better time to get your van insured. And that’s a fact!