(The following statement was released by the rating agency) Link to Fitch Ratings’ Report: UK Non-life Company Market Insurance Dashboard – 1H16 Results here LONDON, September 15 (Fitch) Fitch Ratings says that UK motor insurance premiums will continue rising because the levels of reserve releases that have supported profitability in recent years are unsustainable in the long term. Prices have been rising since early 2015, reaching a 10% yoy increase in 2Q16, according to the Association of British Insurers (ABI). However, premium rates are still below 2012 levels and we believe more rises are inevitable. In 2015 the government announced proposals designed to reduce false whiplash claims. However, even if and when the proposals are implemented, we believe insurers will be reluctant to pass savings on to consumers before seeing evidence of reduced claims costs, so we do not expect the reforms to significantly affect prices before 2018. Fitch believes that the growing use of price comparison websites for household insurance will increase competition, keeping pricing under pressure. More than 50% of household insurance sales are now transacted through aggregators, compared with under 20% in 2009. ABI data showed a marginal yoy price reduction for 2Q16 despite a rise in Insurance Premium Tax and the introduction of a Flood Re levy. Faced with low investment yields and intense competition, insurers are looking to technology, notably telematics, for a competitive edge. In 1H16 several companies reported double-digit growth in the number of telematics policies. Telematics provides a large amount of data on driver behaviour, enabling insurers to price for risks more accurately. The report “UK Non-life Company Market Insurance Dashboard – 1H16 Results” is available on www.fitchratings.com or by clicking the link above. Contact: Ekaterina Ishchenko Associate Director +44 20 3530 1532 Fitch Ratings Limited 30 North Colonnade London E14 5GN Graham Coutts Director +44 20 3530 1654 Media Relations: Athos Larkou, London, Tel: +44 203 530 1549, Email: athos.larkou@fitchratings.com. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
