Motor insurance premiums likely to escalate

The motor insurance premiums is likely to escalate during the next two years.

Reason?

During the past 18 months, several insurers have slashed their premium rates to uneconomical levels. They reduced their rates below the market leader, but were not able to keep their expenses low or to control their claims. Several of these insurers are now "bleeding".

A few days ago, it was reported that the insurance commissioner (from MAS) has asked the insurers to be responsible in pricing their premium rates.

This is similar to the situation in 2002. At that time, the insurers collectively lost over $200 million in the previous 3 years and had to increase their premium rates by more than 20%.

Lesson: Stay with NTUC Income, as they are able to manage the claims. Move to them now, before the premium rates start to escalate.