KPMG’s latest report projects a significant 10% rise in insurance premiums across various sectors in 2024, driven by a confluence of economic and industry-specific factors. Key contributors include inflation, escalating claim costs, and heightened reinsurance prices, which collectively strain the profitability margins of insurers.
Impact on Home and Motor Policies
Home and motor policies are particularly affected. The report highlights that home insurance remains loss-making, with insurers collectively losing hundreds of millions annually due to increased costs of materials and labor, exacerbated by supply chain disruptions. Motor insurance, while slightly more profitable, is also under pressure due to a rise in post-pandemic traffic accidents and associated claims costs.
Strategies for Insurers
To mitigate these challenges, insurers are likely to continue passing on costs to consumers through higher premiums. Additionally, there is a growing emphasis on improving operational efficiencies, leveraging technology for better claims processing, and enhancing resilience to manage the financial impacts of natural disasters more effectively.