London, England, March 26, 2003 � According to actuarial and management consultant Tillinghast – Towers Perrin, the average car insurance premium for the 3 million motorists aged 60 � 75 is �240. The latest findings from its Motor Market Analysis, which monitors the movement of car insurance premiums, reveals that quotes for this age group have fallen by 1% since November 2002. The analysis suggests further falls are expected during the next three to six months.
Although the findings reveal that this market is becoming increasingly competitive and that the difference between quotes is falling, they still reveal a difference between the typical premium for this market which is �240 and the average for the cheapest three quotes which is �220.
Tillinghast�s Motor Market Analysis uses actual population data and real insurance risks to track how car insurance premiums change on a quarterly basis. The latest report focuses on the very competitive market for motorists aged between 60 and 75 which is estimated to be worth �0.5 billion in annual premiums.
Laurence Townley, consultant at Tillinghast said: “This market is becoming increasingly competitive, evidenced by the fact that the dispersion of rates has become more clustered, that is, there is less difference between premiums. Many car insurance companies targeting older motorists are now deciding whether they need to go for market share or profitability and the sector is braced to see how far premiums will fall.”
Tillinghast warns insurers operating in this market segment that even the current level of dispersion will have a large impact on their pricing and marketing decisions. As a result of this, when developing their strategies they need to address a number of key questions which include:
- Do they think the group is very competitive?
- Do they want to chase this group?
- Can they afford to be above the market for competitive groups?
- Can they afford to be at or below the market for unprofitable groups?
- Is their brand strong enough to ignore the market?
- At what level of profitability will they change strategy?
Laurence Townley said: “It is clear that competition is intensifying in this market and insurers will need to place greater focus on tracking a wide range of risk segments otherwise they could see their share of this market or profitability levels fall dramatically.”
About Tillinghast � Towers Perrin
Tillinghast provides actuarial and management consulting to financial services companies and advises other organizations on their self-insurance programs. Tillinghast is a premier independent advisor to the insurance industry; its major clients include most of the world’s top insurers. It operates as one global business, through a network of 42 offices in 20 countries. Tillinghast is a division of Towers Perrin, one of world’s largest management and human resource consulting firms. The Towers Perrin family of businesses also includes Towers Perrin Reinsurance, a leading global reinsurance intermediary. Together, these three businesses have over 9,000 employees in 23 countries. More information about Tillinghast is available at www.tillinghast.com.