UK’s insurance claims costing £200m per day

ISH

ISH insurers paid out almost £200m a day in claims during 2011, according to industry figures released yesterday.

The Association of British Insurers (ABI), whose members represent 90 per cent of the UK industry, revealed the sum in its annual review of the sector.

The motor insurance industry made an underwriting loss for the seventeenth successive year, with one claim made for 14 in every 100 private cars insured and an average payout of £4,527.

The average pay-out for a household fire claim was £10,200, while for a theft claim it was £1,500. As heavy rain continues to affect large parts of the UK, insurers will be concerned to see that the typical household bill following a major flood hit £30,000.

Although 26.2m travel insurance policies were bought last year – at an average of £35 for a single trip – just 700,000 claims were made for accidents that occurred on holidays.

Fraud remained a major issue, with an estimated £983m in illegal general insurance claims during the year, although the ABI claims that an additional £2bn went undetected, which it says adds around £50 to the insurance premium costs of each UK household.

The figures also confirm the industry’s position as one of the country’s major investors, managing assets worth £1.8 trillion, as well as paying £10.4bn in tax.

Otto Thoresen, the ABI’s director general, said: “From protecting millions of customers to being a major contributor to the UK economy, the insurance industry plays a key role in society. The UK is the largest insurance market in Europe and third largest in the world.”

“Insurers are rising to the challenges of issues such as the increasing flood risk, tackling the pension savings gap, reforming the compensation culture, and responding to UK and European regulatory change to ensure that the industry maintains its position as a world leader.”