Following reports that it would be cutting car insurance prices, shares in the internet and telephone based insurance outfit Esure dropped by as much as 6pc. According to reports, the cuts were fuelled by dwindling premiums, down by as much a 7.4pc, issued by the firm over the course of the last three months.
While it was still issuing roughly the same amount of policies, the car insurer responsible for the Shelia Wheel’s brand and automotive price comparison website Go Compare, claimed it had no choice but to slash the price of its premiums to keep up with competitors.
“We have seen some signs of rate stabilisation in the UK motor market but it is too early to say if this represents a turn in the motor rating cycle or is a consequence of rating seasonality,” commented Esure’s chief executive Stuart Vann.
They vowed to remain disciplined in their approach, and make continued efforts to position the business to attract future growth.
Last month the AA claimed the price of car insurance increased by an average of 1.2pc over the course of the last three months, the first such increase in almost two years.
This in in stark contrast to the end of September, when Esure could lay claim to over 1.954m active policies and were 2.5pc up compared to this same time last year. During this quarter, however, the market began to turn, with premiums falling by 7.4pc to an estimated £149.6m.
Barclays specialists gave credit to Esure, claiming the company is making all the right moves in their bid to stay ahead of the market and offset the inflation in claims.
“The company is sacrificing policy growth for pricing. However, there are not enough peers following Esure’s lead, and we view it as unlikely that we will see a material improvement in UK motor pricing.”