Most car insurance providers also operate pensions, life, investment and general insurance divisions.
Whilst each division may technically be independent and separate legal entities, how much threat is the current economic downturn affecting their overall incomes and performance?
Is there any possibility that insurers will be forced to consider diverting resources away from those areas doing well to support the failing parts of their business?
With such unprecedented threats to global financial markets, the financial stability of car insurance companies could come under threat as more and more people drift into the realms of driving without insurance, putting further pressure on the Motor Insurance Bureau (MIB) to compensate innocent victims.
Who funds the MIB? – The insurance companies.
We therefore have a situation whereby insurance providers are asked to pay more to MIB whilst possibly receiving less income from their customers.
It is probable that insurers will turn to these customers by increasing premiums to cover such funding pressures, creating potential for further spiralling as more and more customers find themselves unable to buy car insurance?
It’s a balancing act and there is a chance that some insurers/brokers may fall by the wayside on this difficult journey over the next few years.
Consider These:| Thinking of financial spread betting ? then check us out. |