Insurance policies paid by motorists should increase by around 2 to 3% next year, while the frequency of claims has not really increased. The current situation, but also the galloping sophistication of cars largely explain why, once again, it will be more expensive.
Insurers are not necessarily spoiled this year either: “In terms of climate, 2022 is a catastrophic year”, announces Jean-Philippe Dogneton, CEO of Macif. And to reveal some figures. For this year which has not yet ended, the mutual has already paid 750 million euros to compensate the vehicles and homes of people who are victims of a hailstorm or any other violent climatic phenomenon: “It’s three times more than a usual year”underlines the general manager.
Even before insurers and their representatives started making announcements about 2023, the government had everyone together in early September. The objective was to obtain the promise that insurance rates would not increase more than inflation for the next year. Insurers, represented by their France Assureurs structure, have committed to this, and have even indicated that they grant “a €100 discount on the car insurance contract for young job seekers”. Nor will the increase correspond to an explosion in prices. The Assurland comparator predicts an average price increase of “2.5% to 3%”.
The price of technology
Insurers have therefore agreed to eat part of their hat. The Managing Director of Macif agrees as well as the “combined ratio” of the automotive business should be loss-making next year, which means that the amount of premiums received should be lower than that of compensation paid.
Because in addition to climatic damage, an item of expenditure is growing dangerously: that of the price of spare parts. Mr. Dogneton speaks of a “overinflation because technologies are more advanced” than a few years ago. Thierry Leblanc, director of the after-sales activity of Bosch France, goes into detail: “The more technology there is, the more expensive it is. A mirror now has a sensor and an electric motor. This has nothing to do with what we knew 10 years ago! Wiper blades, today, are of an impressive length, they respect a certain curvature, are sometimes specifically calibrated for such and such a windshield… Everything has changed, including the price”, he notes.
In addition to the greater technicality of the parts, the geopolitical turbulence of 2022 also has a direct consequence on the evolution of the price of spare parts: “The inflationary phenomenon stems from a disorganization due to the Covid. Shipping costs, in particular, have skyrocketed. They were multiplied by 10 at one point. For brake discs, for example, most of the production comes from China. Disc prices have increased by 20%. But to this phenomenon was added the impact of the conflict in Ukraine: thus, all the products manufactured in Europe which had not suffered from the increase in the cost of transport are now suffering from the increase in the price of energy”, announces Marc Ripotot, purchasing director of Alliance Automotive Group.
If individuals are very concerned by the increase in the cost of their heating costs, the problem is even more acute for manufacturers. Stéphane Holt is the managing director of Cora, a company specializing in the distribution of body parts: “Inflation on the price of parts is currently around 7%, whereas the trend was +4% each year until now. Supply costs, energy, everything has gone up. Glazing manufacturers, for example, use a lot of energy to make glass. They are very impacted by the increase. They have increased their prices and will continue to do so,” he let know. And as if on purpose, glass is omnipresent on today’s cars: “A Peugeot 208 is 20% more glazed surface compared to a 206”, further points out Jean-Philippe Dogneton, of Macif.
No more accidents, but more compensation
More expensive mechanical parts and glazing, repeated climatic events, all the ingredients seem to be in place for the price of insurance to soar. However, the accident rate has not changed compared to last year. Between January and September 2022, 41,618 bodily accidents occurred in France, overseas territories included: i.e. +0.4% over 1 year. But despite this stagnation, the costs of compensation for bodily injury are increasing each year by 5 to 7%, according to France Assureurs.
The only solution to try to curb the spiral of increases is now to repair the elements rather than changing them, to use second-hand parts rather than new ones. French law provides that a repair solution with so-called reuse parts must be offered to the motorist. Despite this, only “13 to 14%” repairs at Macif involve elements of reuse, according to its director. There is still a long way to go, with the availability of second-hand parts undoubtedly being the main obstacle to its development. Equipment manufacturers are already working extensively on so-called standard exchange ranges (partly refurbished mechanical parts) in order to offer an alternative offer to new parts. Tomorrow, it will certainly be a matter of going further and making mechanics want to do “real” mechanics rather than systematically changing.