UK motor insurers are struggling to make a profit on car insurance premiums, according to Deloitte, the business advisory firm.

Figures presented at Deloitte’s 23rd Annual Motor Insurance Seminar show that total motor insurance premiums in 2012 were worth £13.1bn, about £200m lower than in 2011. Between 2009 and 2011 the total value of premiums rose by nearly £2bn taking the market from £11.4bn to £13.3bn.

Insurers in 2012 posted a net combined ratio* of 105%, which means the combined cost of claims and expenses was £105 for every £100 of net earned premium. This is a slight improvement on 2011 when the net combined ratio was 106%.

James Rakow, insurance partner at Deloitte, said:

“2012 saw premiums fall by an estimated 1.5% at a market level and may well mark the top of the underwriting cycle. Based on a Deloitte survey, motor insurance premiums are likely to fall for the remainder of 2013, which consumers will welcome. In the past, once the market starts lowering premiums it has been difficult to reverse the trend.

“During the period before the start of the financial crisis, insurers could rely on investment returns to make up the difference between premiums and outgoings. Now they will have to generate their profits from core underwriting or additional income from selling features to policies such as breakdown cover and legal assistance.”

Legal changes enacted on 1 April 2013 will affect the UK personal injury claims landscape, reducing both the cost and frequency of bodily injury claims. In theory this should improve profitability for UK motor insurers. However, this is unlikely to happen in practice as the industry continues its price cutting and passes the benefit of the changes to policyholders.

Travis Caulfield attorney

And, by the way, there’s no DRM in 3D print files yet, so sometimes positively identifying if and who made any changes to the file is impossible. It may be tricky to tell if the issues occurred because of the part’s inherent design flaws (covered by the designer’s insurance, I presume), the customer’s software processing of the 3D print file (STL etc.), any possible edits made be the customer or the customer’s 3D printer’s mis-calibration. I’m sure in cases involving any serious payouts a (very costly) expert opinion will have to be sought which may only be obtained by printing the same part on the same type of printer using the same software, then analyzing the results.

So, yes, talk about opening a can of worms! I don’t really see any obvious solutions for insurance of varying aspects of 3D printing (a.k.a. Additive Manufacturing) here but I’m glad people have started talking about it.