Although we are experiencing the lowest Bank of England interest rate in history and the Treasury is telling us that we have moved into a period whereby the economy is subject to negative inflation, this is not carrying through to insurance claims.
(PRWEB) March 30, 2009
We are in a recession, and it's getting worse. During such times of financial stress it is inevitable that claims inflation will have a tendency to spiral upwards, and insurance underwriters will be keeping a watchful eye on any movement during the coming months.
A spokesman for Staveley Head, one of the UK's leading HGV insurance brokers, said "Although we are experiencing the lowest Bank of England interest rate in history and the Treasury is telling us that we have moved into a period whereby the economy is subject to negative inflation, this is not carrying through to insurance claims."
Claims inflation is the aggregate of claims frequency and the average cost per claim, and both are currently increasing at an alarming rate. The Staveley Head spokesman went on to say "We need to accurately assess the rate at which claims inflation increases in order to determine the affect this will have on HGV insurance premiums in the coming year. We are aware that fraud will be on the increase, by way of staged accidents, exaggerated damage incurred and complete falsehood. We are already seeing a substantial increase in the number of both arson and theft claims, and for significantly large sums - which are having a noticeable impact in raising the average cost per claim. In the light of this escalating trend it will be impossible for insurers to maintain current levels of truck insurance premiums. Without doubt transport insurance is going to increase - but the big question we're all trying to answer is 'By how much?'."
Frequency, without doubt, will increase - dependent on the length and intensity of the recession. The number of burglary and theft claims doubled in the last recession, but according to the Staveley Head spokesman insurance underwriters have not made any allowance for this fact in the truck insurance premiums they have set for 2009. Also, as the recession really starts to bite, and businesses struggle with cashflow deficits, smaller claims will be reported which in previous years would have been considered too small a consequence to warrant a claim.
Staveley Head is one of the leading HGV insurance brokers in the UK, and will give you all the advice and assistance you need regarding this matter, including a very competitive truck insurance quote.