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The UK motor insurance market is facing extremely challenging profitability, intense regulatory scrutiny and changing distribution channels, technology and consumer behavior. To survive, the status quo is not an option.
The motor insurance market is at a critical juncture and insurers are facing challenges on all fronts. A dire few years in profitability, a drying up of reserve releases and a long period of unprecedented low interest rates all mean that premium rate rises are attracting attention and criticism, but not yet making a really significant impact on the bottom line. The market is also under intense scrutiny from the OFT, Ministry of Justice and the Transport Select Committee, and is facing an uncertain future as a result of the potential outcomes of these investigations, along with the impact of the European Court of Justice gender ruling.
At the same time the market is navigating the challenges brought on by changing distribution channels, new technology and shifting consumer behavior and attitudes. To top it all off, the fiercely competitive nature of the market shows no sign of dying down. These challenging and constantly changing market conditions mean that insurance companies cannot afford to maintain business as usual operations. They need to rapidly adapt and change their mindset about how they operate and compete in this sector.
Accenture’s 2011 survey of motor insurance customers in the UK puts the spotlight on some of the major issues facing the industry.
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March 26, 2012
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