Mutual cuts its premiums
INCREASING competition and another year of clement weather led to cuts in the NFU Mutuals insurance premiums of between 5% and 10% in 1994.
But despite the emergence of some new players, the Mutual claims to have increased market share to almost two-thirds, continuing the trend of the past decade.
On the general insurance side, chairman Alun Evans reports a small (1.2%) increase in revenue to £330.7m for the parent society. But fewer claims led to a substantially higher underwriting profit of £14.7m. The personal finance business (NFU Mutual Life) also increased its income by 6% to over £183m, bucking the general market trend.
The one problem area in 1994 was that of liability claims. "The amount of damages is becoming greater with every year that passes," said Mr Evans. For example, the average claim for employers liability over the past five years has increased from £4500 to £17,000. Last year alone the average cost rose by 70% and the sector continued to generate an underwriting loss.
As such, premiums for this type of insurance have been raised – by 10% for employers liability and 11% for public liability – and the situation is being "closely monitored", according to a Mutual spokesman.
Part of the problem of setting premium rates for this type of insurance is that the standards required today may be far removed from those applying tomorrow when a claim is made. Compensation rates may also be higher in the future. *
Alun Evans… Fewer claims.