Big profits won’t keep lid on premiums

Despite insurers posting near-record profits policyholders won't be enjoying lower premiums, according to a JPMorgan and Deloitte Touche Tohmatsu survey of 27 insurers. The report suggests instead that premiums will continue to rise slowly in nearly all categories due to the rising cost of claims and re-insurance. The report predicts motor vehicle insurance will rise by 5 per cent in 2004 then a further 4 per cent in 2005. Household premiums will rise 6 per cent and then 5 per cent. The conclusions will disappoint consumers who expected premiums to fall on the back of insurer profits. JPMorgan and Deloitte say profits in 2003 were not due to high premiums but rather to lower claim numbers and fewer major claims.