‘Huge jumps’ in insurance costs as firms leave Island

Carl Walker, chairman of the Jersey Consumer Council Picture: ROB CURRIE. (37532966)

ISLANDERS are reporting “huge jumps” in their insurance premiums as one broker warns that firms are “quietly withdrawing” from Jersey by pricing themselves out of the market.

Concerns that insurance in the Island is becoming significantly more expensive are also being monitored by the competition watchdog, the JCRA, which said it would “keep an eye on the situation” and consider undertaking a market study if necessary.

Jersey Consumer Council chair Carl Walker said the organisation had been contacted by several Islanders who were seeing significant rises in their renewal quotes.

In September, it emerged that several motor insurers – including Admiral – would no longer be able to provide policies to Channel Islands customers following legislative changes in Gibraltar.

However, Tim Rattray of Channel Insurance Brokers, said that several other factors were also having a detrimental impact on the local market.

He explained that one of the more notably affected areas was car insurance, where the cost of vehicle repairs had increased “dramatically” over the past four years owing to Covid and the war in Ukraine, which had resulted in higher prices for car parts.

He said this was being bolstered by the freight charges incurred when shipping parts to the Island.

“The legal cost of defending liability claims is also a lot higher in Jersey than it is in the UK,” he continued.

“UK firms have been quietly withdrawing from the Jersey market over the years, often by tightening their underwriting criteria to price themselves out.

“Young drivers are also facing a difficult time at the moment when trying to secure competitive motor insurance. Most of the insurers will only offer terms if the parents already have policies with them.”

Additionally, he noted that compliance issues post-Brexit had seen “a number of insurers pull out of the local market”.

“When you see people on Facebook saying their insurance is going up, it is true and the only way to try and reduce your premium is to shop around,” he added.

Gary Kelly, of the Islands Insurance Group, said: “The volatility of the motor market in recent years, coupled with rising inflation and associated increases in claims costs, has presented challenges to insurers operating in the Channel Islands and United Kingdom.”

One Islander, who had previously insured their vehicle through Aviva, said they paid £347 last year.

“The premium they quoted us this year was £566. We hadn’t claimed anything in the last year so we couldn’t understand why there had been such a massive rise. We cancelled it and went with another insurer instead for £271,” they added.

A spokesperson for Aviva said the firm could not comment on an individual case, but added that: “Our prices are calculated individually for each customer, combining details about the individual with the insured vehicle.”

They also referenced statistics published by the Association of British Insurers, which showed that between 1 October and 31 December 2023 the average premium paid for private motor insurance was up 12% on the previous quarter.

Mr Walker said: “We have been aware that there have been issues with insurance, particularly motor insurance, since the middle of last year and have been keeping a close eye on the situation. We are being regularly contacted by Islanders who are seeing huge jumps in their renewal quotations and our advice at this stage is to shop around.”

He added: “Don’t be afraid to play off one insurer against another, as it will help you to get a better deal eventually.”

In a statement, the JCRA said it would “keep an eye on the situation” and that, should a market study be warranted, “we will of course consider undertaking it”.

“The JCRA is focused on making sure markets work well for Islanders, to ensure there is good competition and that consumers are being treated fairly, that prices are reasonable, quality of goods and services is of a high standard, and innovation is being encouraged,” the statement continued.

“We have run several market studies including the freight logistics market, the groceries market and the supply of school uniforms. We have recently launched a study into electricity.”

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