Insurance Rates Increase as Insurers Pass on the Buck Reports Car Insurance 60

San Francisco, CA -- (SBWIRE) -- 01/14/2013 -- There is an upward pressure on car premiums following the increase to insurers' own costs.

Brokers have put passed on the increasing concerns by the reinsurers over the way which persons are able to be compensated for accidents. Insurers offer “insurance for insurers”, by first taking on risks of the insurance firm, that has direct contract with the consumer.

Broker Willis Re stated that motor insurers have had large losses, which trigger reinsurance payouts, and those payouts saw an increase of 35pc and higher on policies that took effect after January. Individuals that did not rely on reinsurance payments faced rises for 20-30pc each.

The passed-on effect to policyholders could be a 3-10pc premium rise, according to some estimates. That could mean hundreds of pounds for some drivers, according to the Financial Times report.

Willis Re stated that the larger and more serious bodily injury claims had increased more often through settlement of periodic payouts. Those payments affected the pay of regular intervals over the lifetime of someone who has been injured in an accident, rather than the individual being given a lump-sum.

Grange Turner, who is an executive director for Willis Re, stated that the situation has created larger uncertainty for insurers, as well as reinsurers. That leads to a need to weigh up factors such as a life expectancy of the claimant and wage inflation.

He said: "Many reinsurers have become increasingly concerned about taking all of these variables on to their own balance sheets."

The additional pressure created by the costs come at a time when female drivers are already predicted to see insurance premiums rise following a European rule last month banning insurers from taking one's sex into account when calculating the level of insurance costs.

Peter Harrison, who is an insurance spokesperson for a comparison website stated:"Any additional cost won't go down well and I'm sure that cost will be passed on."

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