We all Hate Insurance Firms

We all hate Insurance firms. Not content with parting us from our hard-earned for something we really don't want to pay for, irritating us night and day with television adverts only margnially better than those for debt management and bombarding us with junk mail, they're now wanting more money from us.

Following the recent trend set by gas and electricity firms, Motor Insurance companies are jumping on the price-hike bandwagon.

Norwich Union from next year will increase their prices in 2007 by an average of 16%, with prices for the high-risk groups inflating by around 40%.

I write this as someone who is currently getting quotes ranging from over £850 to more than £3200 to insure a 2002 1.1l Citroen Saxo, despite already having two years of claim-free motoring. This is because I am in the unfortunate position of being a 20-year-old male, which makes me public enemy number one in the eyes of Britain's insurers.

The problem is, this price rises seem a little bit short-sighted. Whilst I'm fully aware that insurance firms, like all businesses, are only interested in lining the pockets of themselves and their shareholders, it just seems stupid to announce this, although they seem to think that they are meerly leading a pack which will soon follow.

Amongst the reasons cited for the rise by Norwich Union, is the increase in claim processing costs, due to the presence of around 1million uninsured drivers on our roads.
The problem is, that these uninsured drivers are likely to be the young drivers, those on low income or those with bad driving records, who are being priced out of insurance in the first place. With increases like of 40% for these groups, surely this figure is going to rise much higher than the current one million? That means that in one/two years time, claim costs are going to rise yet again, and I'll probably writing a similar piece in the not-to distant future.

Is Norwich Union seeing something that I arn't?