The impact of rising claims inflation and the cost of implementing systems to comply with new consumer regulations are putting added pressure on insurers’ margins, according to a sector report from Bloomberg Intelligence.

Kevin Ryan, senior insurance analyst at Bloomberg Intelligence, said: “Claims inflation will likely define earnings in 2023 for UK auto and home insurers. A toxic combination of higher used-car prices, increased third-party claims, longer repair times and costlier auto parts will likely significantly boost claims costs, crimping earnings.”

Charles Graham, senior insurance analyst at Bloomberg Intelligence, added: “The Consumer Duty regulations introduced by the FCA at the end of July will likely erode profit in auto and home insurance in the UK. It may also push up premiums for consumers as insurers attempt to cope with the new regulatory burden. Insurers must now demonstrate they have offered consumers appropriate products at a value-for-money price.”

Share Story: