2014 has been an extremely interesting year for the insurance industry, regardless of the types of products you specialise in. Markets across the world have fluctuated at a considerable rate this year, so much so that at times brokers were unsure of the future of the industry. Even now, there is little agreement as to whether the UK economy is struggling or will improve over the next twelve months.
Even though the General Election isn’t until May next year, politicians have spent the past twelve months planning and announcing their policies to the public. This is what has led to most of the confusion as, naturally, each party discussed what would encourage the public to vote for them. Nonetheless, there are a few things that no-one can deny, such as that during 2014 spending power increased for a large percentage of the country.
However, even though there is now more money circulating in the UK this fact hasn’t led to the Financial Conduct Authority (FCA) loosening their reigns over the financial sector. In fact, just a few months ago there were outcries from the insurance sector who claimed that EU restrictions being placed on banks and also themselves were unfair. They claimed that insurance providers had little to do with the 2008 financial crash, however they were being treated as if they did.
In fact, the insurance industry has been placed under an increasing amount of scrutiny throughout 2014 in order to protect customers. One of the biggest issues facing insurance providers is fraudulent claims, with the main culprit being false whiplash claims. This is why both insurers and the government worked hard in 2014 to reduce the amount of pay-outs to suspicious whiplash claims thus saving money for customers as a whole.
However, it seems as though saving money may not be too much of an issue for consumers going forward, as reports published at the latter end of this year suggest that brokers are having to lower their prices in order to keep up with an increasing amount of competition in the market. The issue with this is that in order to provide cheap motorhome insurance (or any kind of insurance for that matter) providers are often unable to offer extensive policies.
Without recouping their losses from claims via new business, insurance providers will struggle to stay afloat throughout 2015. This means that many will need to revisit their business strategies at the beginning of next year as well as keep a keen eye on the loss ratio of any compensation paid.
It seems as though 2015 will be the year of the consumer – insurance companies are being increasingly monitored by the FCA while having to lower premiums in order to remain competitive. Hopefully this means that sub-standard companies who fail to provide high-quality products as well as customer service will soon fall by the wayside, leaving only those that help improve the market and protect their customers.
Victor Millwell has spent years working with numerous brokers, each of which we aim to provide optimal products as well as advice through our regular online articles. Even though 2015 may require insurance providers to adapt and develop their business strategies and products we are sure that many are already up for the task, and we will be here to help them.
All that is left to say is that we hope 2015 is a fruitful year for all our partners and we wish you all a Merry Christmas and a Happy New Year!
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