How the MIB 18% levy increase will affect Motor premiums in 2020
All insurers pay an annual fee (a percentage of each insurer’s premium) to the MIB which contributes to a central fund that provides compensation to people involved in accidents with motorists that are either uninsured or that can’t be traced.
In 2020, the MIB levy is set to increase by 18% to £404m. All insurers will have to account for an increase in their expenses. This increase is due to several factors:
- The change in the Ogden rate
- Claims inflation for large claims
- Claims following acts of terrorism are now picked up by the MIB
- The MIB is building the small claims portal as part of the Civil Liabilities Act
- An increase to internal MIB operational costs
All insurers will have to cover these increases in costs as they’re directly proportional to their annual premium. Our MIB levy is increasing by 18% in 2020. We need to increase our premiums to maintain profitability. Overall, the MIB levy will increase ERS’ prices by 0.5% in 2020, just to stand still.
If you would like to read the full article from ERS Active Underwriter Martin Hall that explores the challenges facing the motor market in 2020 CLICK HERE
ERS is the UK’s largest specialist motor only insurer underwritten by Lloyd’s and rated A+. For over 70 years, we have worked directly with brokers to provide bespoke cover for their customers’ specialist requirements.
For these customers’ their vehicle is often at the centre of their livelihood or passion, giving rise to different or specific needs that cannot be met with one-size-fits-all insurance. At ERS we recognise and embrace this difference; it is why we employ teams of underwriters who are experts in their field to understand each risk individually to provide the ideal cover and it is also why brokers have told us that they trust us more than any other insurer with a specialist motor risk.
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