Car Insurance News - May to December 2004

Posted October 2004

Centrica Sells The AA

At the beginning of October Centrica plc finally wrapped up the sale of the AA to a company formed by CVC Capital Partners Ltd and Permira Advisers Ltd. This follows regulatory clearances from the respective bodies in the UK, the Channel Islands, Ireland and the European Commission. Only time will time what this means regards the future direction and strategy of this famous organisation.

Royal & Sun Alliance Indian Call Centres

Royal & Sun Alliance is the latest UK financial Services organisation to move a substantial number of jobs to India in a bid to cut costs. The figure is reputed to be around 1,100 and will consist of call centre, administration and processing posts closing in the UK. In two years time around 10 percent of Royal & Sun's UK workforce, will be transferred, saving more than 10 million pounds a year, a spokesman for the company said.

Posted September 2004

New Insurance Company for Women

Peter Wood the founder of Direct Line has launched another car insurance company named First Alternative Woman. The venture is backed by the bank giant HBOS and is a sister firm to existing insurance company Esure. Had it not been for the EU recently dropping proposals to ban insurers from charging men and women different insurance premiums, this new company may never have got off the ground. According to First Alternative Woman the average woman driver will save around £130 by switching their car insurance to this new product. The new car insurance company is yet another example of car insurers offering cheaper premiums to targeted segments of the market. Recent statistics published from the Home office also prove women are less risky to insurers than men. Other Insurance companies already targeting women only include Diamond, ladybird Insurance and Girlmotor.com.

Posted June 2004

Is the Car Insurance Market Softening?

Recently some car insurance companies have released statements to the media over their concern that the car insurance market was softening and the result would be a price war. The softening of the market could mean a drop in car insurance premiums as this is a lead product for many companies.

During the mid 1990’s there was an influx of insurers and intermediaries who wanted a slice of the car insurance market and were willing to invest large sums of capital. This led to increased competition and low premiums. After many years of soft market conditions many insurers raised premiums to recoup their losses. The terrible events of September 11th has also landed insurance companies with an estimated $60 billion in losses. This resulted in large insurance premium increases in 2003. Although 2004 has not seen premiums increase as much as the previous year there is cause of concern amongst several of the big insurers as $20 billion of new investment capital has been attracted to Bermuda (a centre for insurance underwriters). As far as the UK car insurance is concerned the harsh market conditions have allowed brokers to claw back some of the market share they lost from the direct writers such as Direct Line, Admiral and Churchill who have been forced to take on only the optimum risks.

March 2004 and April 2004 News Articles