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UK insurance rates are set to soar in coming years

While the banking industry is under serious pressure from the government, the insurance sector is sure to come under close scrutiny over the next couple of years. It is no surprise that insurance companies have seen a major reduction in their incomes in light of the economic slowdown and stock market turmoil, and this reduced income will need to be covered by increased premiums.

We have already heard about substantial increases in business insurance premiums and this issue is sure to move into the household sector and motor vehicle sector in due course. At a time when few of the UK population can afford a serious hike in their insurance premiums it looks as though this is exactly what will happen. Even though many insurance companies have a reserve fund to cover the traditional economic cycle nobody had expected the current slowdown to be as severe and to last as long as it has.

As many insurances are compulsory there will be little choice for UK customers for example those who drive motor vehicles. Household insurance is one sector which may come under severe pressure with some families looking to reduce their cover and in some cases save money by cancelling their cover altogether - although this could turn out to be a serious error of judgement.

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