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Yahoo
2 days ago
- Automotive
- Yahoo
Motor insurance premiums likely to continue to rise as claims and costs surge
SINGAPORE – Motor insurance premiums are expected to continue rising as insurers grapple with mounting losses and rising claims, said industry experts. Latest industry statistics from the General Insurance Association (GIA) seen by The Straits Times show that in the first three months of 2025, gross written premiums for motor insurance rose by 9.4 per cent to $368.2 million, compared with the same period in 2024. Underwriting losses were up by about 14 per cent from $11.6 million to $13.3 million. For the full year of 2024, underwriting losses widened significantly to $33.8 million, from $7.7 million in 2023 and $21.6 million in 2022. This marked a sharp reversal from the underwriting profits of $49.7 million in 2021 and $104.5 million in 2020. Meanwhile, gross written premiums rose 11.3 per cent to $1.21 billion in 2024. Several factors are driving this trend. Insurers grappling with more accident claims and rising repair costs in a competitive market is one reason, said Ms Judy Ng, partner of financial services consulting at KPMG in Singapore. Global inflation, which has pushed up the cost of vehicle parts, and the growing presence of electric vehicles (EVs) which are more expensive to repair are also contributing to mounting expenses. 'Insurers have incurred higher costs of motor claims due to their efforts to fulfil a rising number and cost of motor accidents amid market competition,' said Ms Ng. 'An increase in the number of electric vehicles is another factor, as it can be costlier to repair EVs.' Even leading insurers are not immune to the pressures. GIA's industry rankings for the first quarter of 2025 showed that Income Insurance retained its top spot with a 25 per cent market share. Its gross written premiums rose by $6 million, but its underwriting profit nearly halved, dropping from $9.4 million in the first three months of 2024 to $4.5 million in the same period in 2025. Liberty Insurance stood out for posting the largest improvement in underwriting results, bouncing back from a $567,000 loss in the first quarter of 2024 to a $2.1 million profit in 2025. Allianz Insurance Singapore, on the other hand, saw the sharpest contraction in gross written premiums, falling 18.6 per cent from $26.4 million to $21.5 million. Mr Timothy Jude Fu-Tien Wimala, chief executive of insurance broker Anika, noted that among the six major motor insurers which collectively hold about 65 per cent of the market, AIG and Liberty stood out for achieving strong organic growth from strategic increases of premiums for existing policies being renewed. He said: 'AIG impresses with strong organic growth, leading to a gross written premium increase of more than 17 per cent, while keeping its market share flat. Essentially, AIG has found a way to increase its pricing while persuading its customers to stick around. 'Liberty, however, has beaten everyone in the Big Six by increasing its gross written premiums by more than 21 per cent and still keeping its customer base with market share essentially unchanged.' The Big Six motor insurers in Singapore – ranked by gross written premiums, from highest to lowest for January to March 2025 – are Income, MS First Capital, AIG, India International Insurance, Allianz and Liberty. Generally, insurers that failed to raise premiums lost ground, and even those with meaningful increases saw only marginal share gains. 'This illustrates how the costs of claims and operations are escalating premium growth and customers will carry the load of these increases,' said Mr Wimala. 'Unless insurers can better control claims and manage operating expenses, the only direction for motor premiums is up.' On the consumer end, car owners are already feeling the pinch. Car dealer Fed Wu said one of his customers, a luxury sedan driver with a clean claims record, experienced a 25 per cent hike in his insurance premium after four years with the same insurer – from $1,200 to $1,500. He eventually switched to another insurer, buying a new policy online for $1,101. 'With prices so high, many customers just pick the insurer that offers the lowest premium,' said Mr Wu. While the current pricing pain may eventually ease, some volatility remains. 'Premiums could stabilise over time as insurers adjust to higher claims costs, and more accurately estimate and reflect these rising costs in their prices,' said Ms Ng of KPMG. 'However, some level of increase can still be anticipated in the future to cater for general claims inflation and other emerging factors.' In the meantime, the message is clear: As long as claims stay high and repair costs keep climbing, insurers are likely to say they have little choice but to pass those costs on to consumers. Source: The Straits Times © SPH Media Limited. Permission required for reproduction Discover how to enjoy other premium articles here
CBS News
5 days ago
- Health
- CBS News
Maryland could see a spike in health insurance costs in 2026.
Thousands of Maryland residents who buy health insurance from the state could see an 18% spike in their premiums in 2026. The Maryland Insurance Administration announced the proposed increases from healthcare providers on Tuesday, June 4. Proposed insurance price increase Insurance companies are seeking an average increase of 17% for individuals and 5.5% for businesses with small group plans. "Really, all 250,000 people who are buying coverage for the exchange are going to be significantly impacted," said Johanna Fabian-Marks, the Director of Policy and Plan for Maryland Health Benefit Exchange. "These are the largest increases in the six years since Maryland took action to really stabilize our individual market." The increase by health care carriers is in response to the anticipated loss of federal funds, according to the Maryland Insurance Administration. Federal tax credits offered through the Affordable Care Act are set to expire at the end of the year. If Congress reauthorizes the enhanced tax credits, increases would be about 5% to 7%, instead of 8% to 18.7%, officials said. CareFirst BlueChoice requested the biggest average increase for individuals in the marketplace at 18.7%. Optimum Choice by UnitedHealthcare requested 18.6% and Kaiser Permanente requested 12%. "People could be looking at an average increase of more than $800 per year, per person in their premiums," Fabian-Marks said. What's next for Maryland health insurance rates The Maryland Insurance Administration is reviewing the requests from healthcare providers. The rates need to be approved by the commissioner, and decisions are expected in September. "We will be examining rates filed by carriers closely in the coming months, and urge Congress to take action to address affordability of health coverage," said Commissioner Marie Grant in a news release. The Maryland Insurance Administration is currently working with the Maryland Health Benefit Exchange on designing a state subsidy authorized by the state legislature with House Bill 1082. The measure was established to mitigate the impact of a reduction in federal tax credits. "We are in the process of developing a state program that will provide some financial assistance to people next year to step in if these tax credits do go away," said Fabian-Marks. "But we're not going to have the funds at the state level to fully replace the value of the Federal tax credits that would be expiring." The Maryland Insurance Administration will hold a virtual public hearing on the proposed premium increases on July 30. Find more information HERE. "Feedback from all stakeholders is very important and we urge everyone to participate in the public hearing," Commissioner Grant said in a statement. "Health insurance costs impact everyone, and we want to give all Marylanders the opportunity to be heard as we consider the proposed rates."
