Meanwhile, Mapfre confirms the strength of the sector to face this new context: "The companies we are prepared to face the new framework presented for the industry, which also is expected to rise in claims for greater use vehicle. the important thing is to confront and to take this increase in costs without risk to the technical account, which forces them to be more efficient and innovative in managing this business. Mapfre continue with a professional and rigorous policy to adapt its rates the present and future reality. "
Price increase
Although not widely, specialized insurers in auto insurance have been adapting premium products as changes are detected in the behavior of drivers, as is the rise in accidents or fuel consumption.Mariano Caballero, CFO of Direct Insurance explains that "in recent months, we note that the average price of insurance starts to rise, a sign that the sector has already begun to reflect these effects and will continue to do as long as the different companies go adapting their prices to the new reality ".Knight goes further and estimates that rising prices in the industry should be around 10 to 15 percent, "in order to successfully undertake the current situation and recover pre-crisis levels has impacted slightly to our market ".
positive developments
Auto insurance ended the third quarter of the year with growth of its turnover by 1.2 percent, reaching a turnover of 7,525 million euros, according to data Cooperative Research between Underwriters ( Icea).
Jorge Fernandez Santin, director of Generali Area Automobile recalls that Motor insurance "has always been characterized by high competitiveness and in recent years has shown great flexibility to adapt to the complex reality of the market."
During the years of the crisis "the companies were forced to adapt premiums context marked by less use of vehicles insured. In the same way, now must adjust to the new reality of incipient recovery in which factors such as the park automotive aged and the increased use of cars will have an inevitable impact on both the severity and loss frequency ".
Santín Fernandez admits that "the arrival of Baremo has also generated changes in rates, but each company will be the need to implement its own strategy to adapt." In the case of the company of Italian origin, in 2014 they adapted their strategy "launching renewed efforts to establish new rates based on better segmentation through increased customer awareness criteria and relying on the professional advice of our network mediation".
But the scale is not the only cost increase that Motor insurance faces, and that the sector estimated at 16 percent. The economic recovery has consequences, such as increased use of the vehicle and thus of the accident. According to the Report The evolution of road accidents in Spain Mutua Madrileña Foundation, in 2014 42.000 accidents more than in the previous year were recorded. "If the trend continues, it is likely that some companies have to resort to raise premiums for their auto insurance" regardless of the effect of the new scale, sources said Mutua Madrileña.
Flexibility is key
The flexibility to adapt to market changes and the needs of policyholders and rigorous underwriting policy risk will be the key for companies to be able to absorb the impact of rising claims and the cost of compensation without putting in risk their financial stability and solvency.
Auto insurance ended the third quarter of the year with a turnover of 7,525 million euros, 1.2 percent more than a year earlier.
Last year 42,000 traffic accidents more than in 2013 were recorded If this trend continues, it is likely that many companies raise their prices. Is the average increase that Direct Insurance estimates that the sector will perform in auto policies to absorb the expected increase in costs.
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