Insurers already warned about it at the beginning of the year. Auto insurance premiums must rise to guarantee the solvency of the companies after a few years in which prices had registered falls. The return to normality after the restrictions caused by the coronavirus pandemic plus the rise in costs of both personnel and materials due to inflammation threatened the combined ratio of insurers and hence the need to update premium prices.
According to the National Institute of Statistics (INE), in June motor vehicle insurance registered an increase of 6.5% in the monthly rate, standing out as one of the parcels that has registered the greatest increase, which has ended up having an impact on the monthly evolution of inflation for June. In addition, the circumstance occurs that the growth registered by motor insurance has been the second highest in June, according to the statistics institute, only behind tourist packages, which shot up 11.1%. This figure contrasts with the drop experienced, for example, a year ago, which was 1%.
Already Mapfre, the largest Spanish insurer, announced that at the end of the first quarter the average increase in the premium was being 5%, although it also qualified that these increases were not applied linearly to all clients, but rather depended on their risk profile. Its president, Antonio Huertas, also explained during the summer courses organized in Santander that the increases would have to be in line with the increase in costs.
In relation to this, Rastreator has carried out two studies on motorcycle and car insurance and has found that the average price of a motorcycle policy stood at 326 euros per year from January to May 2023, which represents an increase in 10% year-on-year. As for car insurance, the same comparator has verified that new policies are on average 26% more expensive than a year ago. In addition, where the bulk of the increases are concentrated is in the all-risk ones because, as he explains, the expenses that they entail for the companies are higher and the workshops have increased their repair costs”.
The results will not yet reflect the increases
Precisely, the CEO of Grupo Catalana Occidente, Hugo Serra, assured this Thursday that the increase in the accident rate due to the intensive use of the car that citizens are making after the pandemic will have an impact on an increase in the prices of automobile insurance,
And these statements come just two weeks before the main listed insurers report their accounts for the second quarter, in which they are still expected to show some weakness, since despite this incipient revision of the prices of the policies, the full update will still take time to achieve. As Huertas himself recorded, “the rise in prices takes twelve months to reach the income statement.” Thus, for the period from April to June, the consensus of analysts compiled by Bloomberg expects Mapfre’s profit to be 151 million euros, compared to the 128 million euros it had in the first quarter of this year. year, some accounts that were impacted by the earthquake in Turkey.
For its part, Línea Directa, which already reported losses of 5.3 million euros due to inflation and the increase in accidents, will maintain the red numbers for the second quarter up to 3.45 million euros. In the press conference after the results, its CEO, Patricia Ayuela, also admitted the need to increase the price of premiums on an individual basis.
