Car insurance – Why rates will rise in 2023 – News

Insurance paid by motorists should increase by about 2 to 3% next year, while claims rates have not increased significantly. The current situation, but also the galloping sophistication of cars, largely explains why it is becoming more expensive again.

The insurance companies are not necessarily spoiled this year either: “In terms of climate, 2022 is a catastrophic year”, announces Jean-Philippe Dogneton, CEO of Macif. And to reveal some figures. For this year, which is not yet over, the association has already paid 750 million euros to compensate vehicles and homes of people who are victims of a hailstorm or any other violent climate phenomenon: “That’s three times more than a normal year”stresses the daily manager.

Even before insurance companies and their representatives began to publish announcements about 2023, the government had everyone together at the beginning of September. The goal was to achieve the promise that insurance rates would not rise more than inflation in the next year. Insurance companies, represented by their France Assureurs structure, have committed to this and have even indicated that they provide “€100 discount on car insurance contract for young jobseekers”. The increase will also not correspond to an explosion in prices. Assurland’s comparator predicts an average price increase of “2.5% to 3%”.

The price of technology

The insurance companies have therefore agreed to eat part of their hat. The CEO of Macif agrees as well “combined relationship” of the automotive industry should be loss-making next year, which means that the amount of premiums received should be lower than the amount of compensation paid.

Because in addition to the climatic damage, an expense item is growing dangerously: the price of spare parts. Mr. Dogneton speaks of one “overinflation because technologies are more advanced” than a few years ago. Thierry Leblanc, director of Bosch France’s after-sales activity, goes into detail: “The more technology there is, the more expensive it is. A mirror now has a sensor and an electric motor. This has nothing to do with what we knew 10 years ago! Wiper blades today are of an impressive length, they respect a certain curvature, are sometimes specifically calibrated for such and such a windshield… Everything has changed, including the price”. he notes.

In addition to the greater technical nature of the parts, the geopolitical turbulence in 2022 also has a direct consequence on the development in the price of spare parts: “The inflationary phenomenon stems from a disorganization due to Covid. Shipping costs in particular have increased dramatically. They were multiplied by 10 at one point. For brake discs, for example, the majority of production comes from China. The prices of discs have increased by 20%. But to this phenomenon came the impact of the conflict in Ukraine: therefore, all the products manufactured in Europe, which had not suffered from the increase in transport costs, now suffer from the increase in energy prices”. announces Marc Ripotot, purchasing director at Alliance Automotive Group.

If individuals are very concerned about the increase in the cost of their heating expenses, the problem is even more acute for manufacturers. Stéphane Holt is the CEO of Cora, a company specializing in the distribution of body parts: “Inflation on the price of parts is currently around 7%, while the trend so far has been +4% every year. Supply costs, energy, everything has gone up. Glass manufacturers, for example, use a lot of energy to make glass. They are very affected by the increase . They have raised their prices and will continue to do so,” he let it be known. And as glass is intentionally ubiquitous on today’s cars: “A Peugeot 208 has 20% more glazed surface compared to a 206”, Jean-Philippe Dogneton from Macif also points out.

No more accidents, but more compensation

More expensive mechanical parts and windows, repeated climatic events, all the ingredients seem to be in place for the price of insurance to increase. However, the accident rate has not changed compared to last year. Between January and September 2022, there were 41,618 fatal accidents in France, including overseas territories: i.e. +0.4% over 1 year. But despite this stagnation, the cost of bodily injury claims is rising by 5 to 7% each year, according to France Assureurs.

The only solution to try to slow the spiral of increases is now to repair the elements instead of changing them, to use used parts rather than new ones. French law stipulates that a repair solution with so-called recycled parts must be offered to the motorist. Despite this, only “13 to 14%” repairs at Macif involve elements of recycling, according to its director. There is still a long way to go, and the availability of used parts is arguably the biggest obstacle to development. Equipment manufacturers are already working to a large extent on so-called standard replacement series (partially refurbished mechanical parts) to offer an alternative offer to new parts. Tomorrow is definitely about going further and getting mechanics to want to do “real” mechanics rather than changing systematically.

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