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UK car insurance sector to benefit from move to Plan B
UK car insurance stocks Direct Line (DLG) and Sabre Insurance (SBRE) could be among the companies enjoying a temporary benefit from the Government’s latest Plan B to help fight Covid-19, which includes the requirement to work from home if possible.
A reduction in cars on the road should in theory see fewer people get in accidents and therefore fewer insurance claims.
The general insurance sector has seen a big change in pricing for premiums and claims since the onset of the pandemic.
Direct Line last month said the surge in second-hand car prices was pushing up costs per claim. If a car is written off in an account, the insurer pays out what the car would cost in the second-hand market.
In the home insurance market, claims have fallen because more people have been staying at home for longer periods, meaning burglars have been deterred from breaking into properties and water leaks have been addressed quickly.
However, insurers have suffered because home premiums have fallen by 8.2% in the past 12 months, according to analytics group Consumer Intelligence, driven by a price war to pick up more business from comparison websites.