Decisions on the underwriting of insurance risks and the setting of premiums, including for motor insurance, are matters for judgment by individual private insurance companies and EU law prevents us from intervening directly in the matter.
Motor insurance premiums are normally based on underwriting experience, including trends in the level, frequency and cost of claims, for particular risks and classes of risk. It is reasonable to question why motor insurance premiums should be increasing in an environment where, for example, the number of motorists is increasing, while at the same time, accident rates are declining.
The insurance industry has pointed to a number of factors to explain increases in premiums. These include the high cost of settling claims, High Court decisions that require insurers to strengthen reserves for claims arising in past years and increases in reinsurance prices that they must pay.