The commitment from several large motor insurance companies in the Republic of Ireland to give their customers premium relief will heap more pressure on their UK peers, says one analyst.
Details on specific refund amounts continue to emerge from giants Allianz, AXA, RSA and Zurich after they announced the commitment, with Allianz today revealing it will give €30 ($32) to every customer,
Reports following AXA’s announcement on 28 April that it had set aside €20m ($21.7m) for refunds suggested each customer could receive the same amount as Allianz policyholders, but the firm is yet to confirm this.
GlobalData senior insurance analyst Daniel Pearce said: “The steps taken in Ireland will strengthen the case for insurers to follow suit in the UK.
“We’ve seen the pressure on UK insurers increase in recent days, and the more cases of such measures being taken in other markets, the harder it will be for providers not to follow suit.”
He points to the fact that the lockdown and travel restriction measures in place are the same across both countries, and so too are the reductions in claims insurers expect to occur.
“There is also the fact that these insurers are far more well known to UK policyholders than those in the US (where the trend began to pick up steam), which will also increase the expectation that the measures should be rolled out in the UK,” Pearce adds.
Motor insurance providers in the UK have been under growing pressure to refund policyholders in a move that would bring them in line with those operating in the US, and now with growing frequency in Ireland.
So far, Admiral is the only British insurer handing out a rebate (£25 per customer), but Pearce believes others will follow suit.
“The move to refund premiums will undoubtedly set a precedent for other leading players, who will want to ensure that policyholders remain loyal to their brand,” he says.
“Given this, it should be expected that other providers will follow suit, but the situation is not straightforward.”
“Many providers will be facing an uncertain future given their exposure to other lines of business, where the number of claims has increased following the Covid-19 outbreak and the economic impact is yet to unfold.”