Lloyds TSB rejects insurance increase

04 September 2006
Lloyds TSB has warned that the recent increases in insurance premiums announced by Norwich Union could only help to exacerbate the problem of drivers without cover.

According to the insurance arm of the high street bank, there are over one million uninsured motorists in the UK and Norwich Union's announcement of large-scale price increases for cover could cause this number to jump.

Phil Loney, the managing director for Lloyds TSB Insurance, says that although Norwich Union's announcement had been predicted by many within the industry for a while following long-running cuts and price wars, the extent of the increases has surprised many.

"Whilst we anticipate a rise in motor insurance premiums due to the rising cost of claims, we do not expect to see significant increases of the scale predicted by Norwich Union," he said.

"As an industry we have a duty to ensure that motor insurance is competitively priced and widely available to all drivers," he added, noting that if too many people felt they couldn't afford insurance there was a risk driving without it may become more common.

Last week, Norwich Union announced it would be increasing some of its high-risk insurance premiums by up to 40 per cent in a bid to end an ongoing industry price war.

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