With the banking industry under serious pressure from the Government, it is likely that the insurance sector will come under close scrutiny over the next two years.
As a result of the economic slowdown and stock market turmoil, insurance companies have seen a major reduction in their incomes and this reduced income will need to be covered by increased premiums. There have already been significant increases in business insurance premiums and these rises will probably move into the household sector and motor vehicle sector in due course.
Many insurances are required by law, so for UK customers who drive a motor vehicle, car insurance is compulsory. However, the home insurance sector may come under severe pressure with some families looking to reduce their cover and in some cases save money by cancelling their cover altogether. This action could turn out to be a serious error of judgement.