Insurance market research group Consumer Intelligence estimates that the average car-insurance premium increased by nearly 50% in the year to June. While this has led to accusations of profiteering by insurers, in fact the opposite is true. Even though car-insurance premiums have risen to a record high, the industry suffered its worst underwriting performance in a decade last year as the cost of claims spiralled out of control.
According to consultancy EY, the UK motor-insurance sector combined ratio, which displays claims and costs as a proportion of premiums, has hit 109.5%.