UK MOTOR SET TO SEE DOWNTURN IN PROFITS, REPORT CLAIMS

The UK motor insurance industry is likely to see its margins come under pressure in 2013, according to a report just released by accountancy firm Ernst & Young (E&Y). It estimated that the combined ratio in the UK motor sector last year was 102%, better than in the previous five years and low enough to put much of the UK motor sector into profit once additional income was taken into account. Since then, however, pricing pressure had strengthened, causing a softening in prices that was seen by E&Y's Catherine Barton as indication that "the market has turned too soon". E&Y's view of the just-introduced legislation that bars insurers from receiving referral fees from lawyers was that its effect on UK motor insurers' income overall will be "neutral at best".