Friday, September 29, 2023

Automobile, home, health… the price of insurance risks skyrocketing in 2024

As inflation continues to rise in France (+4.9% in August), will consumers also be penalized by the prices of their various insurance policies next year? Automobiles, health, housing… in 2024, the purchasing power of households will be further reduced by the increase in various insurance contracts, warns the company Facts & Figures in its estimate of September 18. It is in health mutuals and home insurance where the increases should be most pronounced: +8% expected in 2024, compared to +4% for motor insurance, which has however seen the increase in the price of spare parts amortized by the drop in the number of accidents on the road.

Above all, the bill increases year after year. Last year, due to inflation, Facts and Figures forecast increases of 3% to 5% in car insurance (with a greater “intensity” in SUV vehicles, which are very expensive to repair), while the frequency of accidents returned to pre-health levels. crisis level, and 3% in home insurance. Therefore, the percentage increase would double.

To establish these results, Facts & Figures anticipates price increases in the costs to the insured, on which an insurer relies to establish its contracts. Thus, in addition to the increase in the price of spare parts linked to that of raw materials, the strategic consulting firm adds in particular the evolution of the cost of automobile labor, +5.3% in the second quarter of 2023 in one year consecutive. 12 month period.

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In the case of healthcare costs, significant cost increases are almost widespread: “consultation of general practitioners: -0.5% in seven months and +1% annually, consultation of specialist doctors: +7.5% in seven months and +6.6% annually, dental care: +6.9% in seven months and also annually… “, details, among other things, facts and figures. Among the expected strong increases, medicines increased by +7.1% in seven months and +7% annually.

Likewise, for insurers, the increase in the price of medical consultations from 25 euros to 26.5 euros starting in November 2023 will generate an estimated cost of 100 million euros for insurers.

Will insurers pass on all the increases?

However, insurers have already announced an increase for 2024, certainly, but contained. Insurance price increases “will revolve around inflation”, Adrien Couret, general director of the Aéma group, promised AFP at the beginning of September. This statement by the president of the entity that brings together the insurers Macif, Aésio and Abeille illustrates the sector’s reluctance to assume new commitments after a year of efforts, according to an article published on Thursday by Argus de l’assurance.

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Insurers periodically point out that they have to face the increase in natural disasters, but also a very significant inflation in the costs of repairs, especially in the automobile sector.

However, Elisabeth Borne’s government wants a new gesture of moderation for the profession. “Honestly, the situation is very difficult for insurers this year but we will reiterate, like last year, our call for moderation in everyday insurance prices”Bercy had indicated to the specialized media.

In September 2022, insurers committed to keeping price increases below the level of inflation for 2022 and 2023.

But last June another unforeseen event was added to the natural disasters in France. Damage related to the urban violence that followed the death of a teenager killed on June 27 by a police officer will cost insurers 650 million euros, the professional federation estimated, or more than double the 280 million planned euros.

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The last sector affected is reinsurance (insurers’ insurance), whose prices will also increase. The Munich Re group, whose main activity is to guarantee the risks assumed by insurers, confirms “its annual objective and aims to generate a total profit of 4 billion euros throughout the year”says a press release.

The cost of drought on homes in France

A total of 1,022 municipalities affected by drought in 2021 and 2022 have been declared in a state of natural disaster, according to a decree published in the Official Gazette.

Houses built on clay soils are at risk of cracking due to ground movements caused by alternating periods of rain and drought. This phenomenon is called shrinkage-swelling of clay soils (RGA).

“More than half of the individual homes in France, or 11.1 million, would potentially be affected and 3.3 million of them would be strongly affected.” say the insurers.

In 2022, the cost of drought on households is estimated at more than €3 billion, a record since the creation of the “natural disasters” regime in 1982.

(With AFP)

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