15 Jul 2019
Posted in Insurance
In-vehicle technology could soften the blow for disappointing Ogden rate change
Following the latest Ogden rate change from -0.75% to -0.25%, Yasha Kuruvilla, General Insurance Associate Analyst at GlobalData, a leading data and analytics company, offers his view:
“While this increase is good news for insurers the scale of the change has left many disappointed. On the plus side, we have seen quite a substantial increase in the prevalence of in-car safety features that will decrease the number of major accidents occurring on UK roads.
“According to GlobalData’s 2018 General Insurance Consumer Survey, the proportion of cars with anti-collision alerts, lane departure warning systems and automatic e-braking has all increased by 32.6%, 21.7% and 15.9% respectively. The increased prevalence of these systems will have a marked effect on the safety of UK roads and lead to less bodily injury claims being paid by insurers, potentially softening the blow of the disappointing rate change.
“There has also been a sizable increase of 70% with regards to the proportion of cars fitted with a dashcam, undoubtedly helping to reduce the number of fraud cases.
“While this change may not have been as considerable as hoped for by insurers, as vehicles become smarter the burden of claims will shift away from bodily injuries and towards repairing these expensive vehicles – an area where the Ogden rate has no power.”