INSURER LV= yesterday said it expects the cost of motor insurance to rise next year because new laws designed to reduce spurious claims have not had the desired effect.
Mike Rogers, chief executive of the mutual, said some rivals had “over anticipated” the impact of the rules and cut car insurance premiums too much.
“Looking towards year-end and 2014 we expect rates in motor insurance to recover,” he said.
LV=’s income from its motor insurance fell over the last year, despite adding 200,000 new customers. It ascribed this to the highly competitive pricing environment.
Meanwhile, the company’s life insurance division saw a small decline in sales to £117m for the first nine months of 2013, largely due to a fall in demand for annuities products.
“The retirement division has seen strong growth in pension sales while on annuities we took the decision to focus on returns rather than market share and this impacted sales in the first half of the year,” Rogers explained.
Total in-force policies across the group rose from 4.1m to 4.4m, while total group income has hit £1.1bn so far this year.