Coronavirus: Insurer to give £25 back to drivers as claims fall during lockdown

Insurance company Admiral is handing back £25 each to millions of car and van insurance customers as claims fall during the lockdown – putting pressure on rivals to follow suit.

The refunds, totalling £110m, are to be paid out by the end of May and will go to each of the 4.4 million vehicle policies covered at 20 April.

Admiral said it was able to give the cash back to customers as there were fewer drivers on the road since restrictions designed to stop the spread of COVID-19 were imposed.

The company also pledged a further £80m towards lowering prices for cover to reflect the drop in claims, as well as further initiatives.

That includes waiving motoring claim excess fees for NHS or emergency service workers.

The £190m total committed was equivalent to a third of its 2019 profits.

Unlike some other insurers, Admiral has not scrapped dividends in the face of the coronavirus crisis.

Cristina Nestares, chief executive of UK insurance at Admiral, said: “This is an unprecedented time when people across the country are driving significantly less than before the lockdown, and we expect this to lead to a fall on the number of claims we are seeing.

“We want to give the money we would have used to pay these claims back to our loyal customers in this difficult time.

“We have also already reflected this change in driving behaviour in our pricing for customers and will continue to do so.”

Consumer group Which? called for other insurers to follow suit.

Gareth Shaw, head of money at Which?, said: “Admiral’s decision to provide partial refunds to all of its car and van policyholders will certainly be welcomed by customers experiencing unforeseen pressure on their finances.

“Firms that act fairly now may see that they are rewarded in the future and we encourage all other car insurers to follow Admiral’s lead.”

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The Association of British Insurers (ABI) said the industry was being “as flexible as possible”, with free cover for key workers who need to start using their cars to commute and cover being extended for those using their vehicles when working as NHS volunteers.

It added that insurers were facing “continuing cost pressures, arising from increasing repair bills and higher theft claim payout”.

The ABI said: “Pricing decisions will be a matter for individual firms.

“However, in a competitive market any reduction in cost pressures over the course of 2020 can clearly benefit consumers.”

(c) Sky News 2020: Coronavirus: Insurer to give £25 back to drivers as claims fall during lockdown