Recent motorcycle premium hikes by large carriers have led to a flurry of shopping chopper riders – and they’re taking multiple lines of business with them, say brokers.
A number of motorcycle policyholders – often with clean driving records – have seen premiums rise substantially in 2015 and 2014, upwards of 20%. TD General Insurance and Certas Home Direct have lead the hikes, filing for rate increases of 18.41 – 21.06% respectfully. Adam Mitchell, President of Mitchell & Whale Insurance
, says given the carriers’ large market share, any premium hikes lead to significant market shifts – and very angry policyholders.
“(Certas and TD) make up almost 70% of the market, and they raised their prices 20% - that’s created a lot of turmoil in the market.” He says. “If somebody moves your car insurance up 10% - whatever, you move your car insurance. But when they move your bike insurance up, it’s like they’ve insulted your spouse… I’ve never seen so much disdain for the companies from established riders in their 40s and 50s with really nice cruisers – they just get so materially pissed off.”
As a result, riders have packed up multiple policies, such as their home, cottage and business coverage, and are shopping for competitive options. “A lot of the market hasn’t been tolerant of it and are moving a lot of business,” Mitchell says. “(For example) Wawanesa have been the recipient of a lot of business – and they’re getting a lot of business they’re not targeting.”
Large carriers have defended the price hikes to the media, pointing to an increase in the number and severity of claims.
Myron Kuepfer, general manager at Riders Plus Insurance says such carriers may be experiencing fallout from underestimating – and underpricing – based on the given risks. “If you look for the habits and the experience of the riders who have proven to be less of a risk in that sense, you end up with a better loss experience,” he says.
“For us, our rates are stable because we are very selective with very tight underwriting, selective in the sense – it’s about pushing safety issues for our riders, pushing safe bikes, all of those sorts of things, looking for experience, people taking rider training, responsible writers, and it pays dividends.”
Mitchell adds that some insurers have a history of covering riders with higher risk profiles, leading to a rash of accidents later on. “…For a long time State Farm was writing young teen drivers with a lot of testosterone, really fast bikes and not a lot of experience – none of the other market wanted action on that, they were worried the premiums were so small that when you got injured on a motorcycle, you’re really severely injured.”
“By contrast it will likely be bigger and bigger.”