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What can you expect from your insurer in 2025? Ashbourne Insurance’s Peter Smits offers some insight
“I think we are still going to see price increases, although I do believe we have now seen the peak – and that 2025 will have more modest increases”
As we approach the end of another year, we all start to reflect on past performance for the 12 months just gone and ponder the prospects for the year ahead – and insurance is no different.
My overriding view is that the motor insurance industry has some work to do to repair the reputational damage sustained as a result of poor service levels in recent years. It will certainly take some time and effort to build confidence among the insurance buying public again.
While it could be argued that the repair networks have been at the mercy of a perfect storm – Brexit, a global pandemic and the conflict in Ukraine – the industry has compounded this with very poor service levels from the insurers themselves.
Those companies that out-source ‘first notification of loss’ for claims or rely on accident management companies to handle inter-insurer correspondence have been sadly lacking any clarity or urgency in the past few years.
This situation can’t be resolved overnight and I suspect there is more pain ahead for those who suffer claims as we move into 2025. However I do think that there is an acknowledgment among insurers that things need to improve. Unnecessary delays in repair just serve to cost everyone more money and if insurers are to address claims inflation, they need to do their bit.
Like all industries, artificial intelligence continues to be the hot topic, with industry spokesmen and women commenting that insurance is lagging behind other sectors with regard to its adoption.
That said, I know of many insurers who are ready to adopt and implement AI systems to help speed up and streamline administration processes. One insurer I spoke with recently, from one of the largest motor insurers in the UK, will start to adopt AI to review, grade and approve claim applications early in 2025. Perhaps this next step is the answer to some of the poor service levels that have been experienced in recent years?
It could be argued that insurers have been using AI pricing for many years – after all, a premium quote is only ever someone’s best estimate based on previous experiences. None of us, drivers included, can foresee potential claim patterns in the year ahead.
We’ve been talking about event- and usage-based insurances for years and maybe AI is the key to unlocking the puzzle by providing real-time pricing to unlock new capabilities. If I’m honest, I still think, as an industry we are a long way off AI being adopted by the mainstream. However, we might just see a few niche insurance markets introduce some offerings in 2025.
Finally to the contentious issue of pricing. What are my hopes and aspirations for the cost of your insurances in 2025? Well, I think we are still going to see price increases, although I do believe we have now seen the peak – and that 2025 will have more modest increases.
Prestige and exotic vehicle marques will again suffer more than most, as worldwide sanctions mean that theft of these vehicles remain high to meet the demand from certain quarters.
Insurers are still struggling with pricing EVs – the complex and digital nature of these vehicles result in a hike in repair costs, although this can also be attributed to technology in today’s (very modern) normally aspirated models as well.
Insurance cost is more often than not most people’s pain-point, however more and more of our customers are no longer looking for simple financial protection from their insurance solution. They want their insurer to provide a customer-centric, tailor-made solution that ensures risk protection, claim intervention and prevention.
As well as competitive pricing, I am hoping for insurers that can focus on purpose, rebuild trust and deliver an agile organisation with processes that can meet emerging customer needs. Let’s see what happens...
