The insurance market is having a tough time as AXA – a big player in the motorcycle underwriting business – is the latest to pull out of the motorcycle insurance market.
AXA’s decision was announced in February and came after a shake-up of key staff back in December when Alain Zweibrucker was appointed as Retail Chief Executive. Commenting about the move to drop motorcycles from their UK offerings, an AXA spokesperson told Insurance Times:
“Following a detailed review of the AXA retail motor business – and as part of our strategy to continue enhancing our intermediary proposition – we’ve made the difficult decision to withdraw from the motorcycle market starting March 2024.
“This change will allow us to further strengthen our offering across our other intermediated products. We have made our broker partners aware of these upcoming changes and will be supporting them with any requirements they may have.”
Is your policy affected?
You can quickly tell if your current insurance will be affected by AXA’s withdrawal by checking your certificate of motorcycle insurance and looking at who the underwriter is. If it’s AXA then you’ll need a new insurer once it’s time to renew.
Although there are other underwriters, AXA’s withdrawal means that there will be less competition and fewer choices for comparison sites to check when you’re getting a quote. It also means insurance is likely to rise and it may be harder to get some types of cover.
Rising costs in a depleted market
AXA’s decision was quietly announced to the insurance world in February and took effect on March 3rd 2024. They had around a £17 million share of the £250 million bike market in the UK. They’re not alone in shaking things up though. Zurich stopped writing bike policies last July and Zenith stopped writing policies for high-risk machines like the Vespa GTS at around a similar time. The chances are they won’t be the last underwriters to pull the plug but how is it likely to affect us riders? If you’ve tried to renew your insurance recently you’ll have probably noticed a steep rise in premiums, even after shopping around. Certain machines may also be harder to gert cover for.
Markerstudy
Further to that, Markerstudy’s underwriting arm announced in November that it would be “Prioritising certain lines of business over others” and is also involved in a merger with Atlanta. If that buyout goes ahead it could further reduce bike-specific underwiters.
Although Markerstudy hasn’t specifically said they won’t be insuring bikes (they currently have around 30% of the bike market) if they do it will have big implications for other underwriters. Their backers can only bankroll so much new business each year, it’s not a bottomless pit and they want a return on their investment. One underwriter was said to be paying out £1.20 for every pound they took in premiums last year.
Terminated by MCE
“MCE Insurance is the UK’s Number One provider of motorcycle insurance”
Or they were until they first got into trouble back in November 2021. They were put into administration and their 105,000 customers were told that their insurance would be terminated at the end of January 2022. This caused huge ripples within the insurance industry as specialist brokers were literally swamped with new enquiries.
Most of MCE’s former customers were swallowed up by other brokers. However, around 20,000 were enticed to stay with the new firm born out of MCE’s ashes – ‘MCE Insurance Limited.’ That company only lasted until 17th July 2023 before being placed into administration. MCE were underwritten by Sabre, thankfully they took on the new MCE policy holders themselves this time around.
Struggling for cover?
Some Piaggio MP3 riders (and other scooters of a similar style) who are riding on a car licence have already started to run into problems when trying to take out a policy or renew their insurance. I’ve been seeing comments on various scooter pages over the last few weeks from owners who have suddenly found they can’t renew their insurance, or that their usual broker can’t provide cover for them on certain machines.
Lexham Insurance
Norfolk-based Lexham Insurance can cover pretty much anything a scooter (or bike) rider needs. They offer multi-bike policies, agreed value, cover for custom machines, modified machines, tuned engines and of course the more run-of-the-mill standard scooters. You’ll also find Lexham at pretty much every National Scooter Rally so you can talk to them face-to-face.
Lexham can cover you
We asked specialist scooter insurer, Lexham whether they could still offer cover for MP3 riders without a full bike licence?
“Piaggio MP3’s and similar three-wheel scooters (which are classed as trikes) such as the Peugeot Metropolis and Yamaha Tricity 300 have experienced popularity since their release. Especially in busy urban environments thanks to the fact that in the UK these can be ridden on a full car licence and offer commuters the chance of commuting quickly and conveniently compared to sitting in a car during heavy congestion.
However, in recent times it has become noticeable that the open availability of insuring an MP3 or fellow three-wheel scooter on a car licence has declined, with either schemes or even insurance products being withdrawn from the market.
“This presents a challenge to some customers now unable to renew or searching for insurance. Here at Lexham Insurance we continue to be able to provide competitive insurance quotations for those on a car licence and looking to insure an MP3 or similar three-wheeler (classed as a trike). If you’d like a quote on your three-wheeler head on over to Lexham Insurance or give us a call and the team will be able to assist you.”
Shop around
When it’s time to take out a new policy or renew an existing one you should always shop around. Not all brokers or specialists are on comparison sites (Lexham for instance) and an online quote can’t be influenced, unlike a real person. Phoning up is often the best way to bring the price of your policy down, especially when playing one insurer off against another.
Money Saving expert, Martin Lewis advises to start getting quotes 20-26 days before your current insurance runs out. Bear that in mind when your insurance is getting close to the renewal time.
Bikesure
Bikesure has been providing specialist motorbike insurance since 1990. As a broker, it compares cover from dozens of providers to produce tailored policies that offer the very best deal to each customer. Insurance is available for riders of all ages and experience and covers every machine from imports, trikes, quads, sports bikes, Chinese scooters, mopeds, classics, modified bikes and much more.
Bikesure is part of the Adrian Flux Insurance Group and operates as its dedicated and specialist motorcycle department. You can get a quote here.
We asked Tom Clay, Bikesure’s motorcycle product manager a few questions.
Can you tell us how AXA withdrawing will affect you and your customers?
“While AXA withdrawing from the UK motorcycle market is far from ideal, we have a wide range of schemes with a diverse panel of insurers to pick up the business. We took steps to mitigate the loss of AXA early on and as a result there has been little to no impact on our customers. We remain well placed to provide insurance for all who were, or have been, affected by the news.”
Are there any other factors that are making bike/scooter insurance more expensive?
“There are several external factors that are making motorbike and scooter insurance more expensive than usual right now. Inflation is increasing the cost of labour and parts and supply chain issues mean it’s taking longer to get parts and for bikes to be repaired. This increases the length of time hire vehicles are being used which, in turn, creates additional expenditure. Costly new machines with the latest technology increases the value of what’s being insured and also adds to total loss settlements and repair costs. The same goes for the car sector, which is involved in many motorbike claims. The increase in bike theft and cases of insurance fraud in 2023 have only exacerbated the problem, as has the number of claims where third-party settlements are stretching into the millions. Many of these involve complex personal injury issues and payouts that our industry would describe as catastrophic. There are still plenty of ways to try and find savings and we remain inundated with riders getting in touch looking to speak to a friendly voice on the phone who can provide expertise in helping to find the most attractive and appropriate cover, in terms of price and quality. But it clearly remains a challenging time for all concerned when it comes to insurance.”
Can you still provide cover for owners of tricycles riding on a car licence?
“Bikesure can still provide cover for customers looking to insure a Piaggio MP3, or any similar three-wheeled scooter style vehicle on a car licence. As always, it is subject to certain terms and criteria being met, but with a wide range of specialist schemes available, we can almost always provide a bespoke policy that would suit a rider’s needs regardless.”
What’s driven these changes?
Aside from the rising cost of inflation, and a smaller pool of underwriters, there are other factors at play.
Insurance is a business and like any business, it needs to be profitable. We all complain that our insurance has gone up at renewal time but in reality, most of us are middle-aged and an average classic scooter policy is probably around £150. It’s not a massive amount when you think of the potential risk to an insurance company.
Ruff deal?
If we compare scooter insurance to the cost of pet insurance you’ll realise most of us don’t get a bad deal.
Mongrel?
The insurance quote above was based on my 3-year-old posh mongrel (I’m not sure if you can still call them that these days?). It would cost me £543 a year to insure Henry. He’s in good health and only has a market value of a few quid (priceless to me). His very expensive insurance also has a £4,000 a year claim limit with lots of exclusions and an excess. He’s also not insured for fire or theft.
In comparison, a motor insurer has a very risky business.
Theft
A scooter is much easier to steal than a car if it is left out in the open. It can be lifted or rolled away quite easily. Classic scooter riders aren’t as likely to be victims of theft because we cherish our scooters, use good security and tend not to leave them parked up in town/city centres (except on rally weekends).
Certain big-name modern autos have been a favourite with thieves, the Vespa GTS and TMAX are the two most stolen scooters in the UK and insuring one is likely to cost more than it used to.
To help you keep hold of yours, we supply trackers, anti-hijack devices and Easy Block wheel locks in our SLUK Shop. MoniMoto trackers have recently been reduced to £115 and Anti-hijack immobilisers are reduced from £180 to £125.
Modern tech
All modern vehicles have lots more tech than they used to, which all adds to the value and cost of repairing or replacing in the event of an accident. That also goes for the car that hit you, it’ll cost more to repair or replace than an old banger.
Accident claims
Bike and scooter theft is a relatively low cost to an insurance company when compared to an accident that results in injury (highly likely in a scooter/bike crash). Compensation claims can easily run into the millions, add in a pillion as well and you’re doubling the potential outlay. Your sub £200 insurance policy – a very small percentage of which goes to the broker who sold you the policy – can suddenly cost the underwriter a fortune. Repairing a human is a very time-consuming and costly business.
Record your rides
Evidence from in-car dashcams have proven to be invaluable for proving who was at fault in accident claims. A few seconds of footage can prevent months of legal wrangling.
If you’ve got an action camera use it whilst riding and record on a loop, it might just help you one day.
An insider’s view
We spoke to independent insurance consultant, Ian Pritchard about the current bike insurance market. Ian has a 25-year history within the insurance sector, spending 18 years as an underwriter. For much of that time, he specialised in bike insurance and knows the business from all angles.
Here’s what he had to say…
Capacity drought
The overarching problem at the moment for motorcycle insurance is that we have a capacity drought in the UK motor market. That’s particularly true of anything non-standard (motorcycles are typically treated as non-standard). The drought has come about for a number of factors, partly because, in order to underwrite you need capital behind you. So the capital, ‘the money’ really creates the ability to underwrite insurance. And you have to hold so much capital against your insurance underwriting and people only put capital into something if they think they’re going to make money.
Risk and gain
Capital can be used in any industry, it could be transferred around the world, it can be used to invest in different sorts of things and at the moment UK motor is seen as quite a high risk. So of course, if you’ve got a pot of money and you want to invest it, you’ve got to put it somewhere where, alright, it’s got to be a bit risky, otherwise you’re not going to get the return but you still need to be able to make money from it. That’s what’s unattractive at the moment about UK motor and in particular non-standard motorcycles. What happens is, when there’s a drought, people pull out of things that they’re less confident about and make sure they’ve got capital and therefore underwriting capacity to write the things they are confident about. Motorcycle is one of those things at the moment I’m afraid.
Too cheap?
I think partly it was due to a few years ago when probably, not that your punters would agree with this, but motorcycle insurance got too cheap. I’ve got a scooter (a Honda PCX) and I’m paying 80 quid for the insurance a year. I only do a few thousand miles on it a year but it’s one of those where you look at it and think, ‘Actually 80 quid for all the things an insurer is covering is actually ridiculous.’ Some insurance companies who used to do motorcycle insurance 10-15 years ago just went, ‘I can’t be bothered with this.’ I suppose at the moment we’re at a low point of competition and that’s part of the reason why rates have gone up. They’ve also gone up for all the reasons you’ve got in your article.
Less competition
There’s an underlying thing that people will still overlook: capacity drought, which is driven partly by investors having other options. But also, when you talk specifically about motorcycle, it’s such a small market relative to other markets, is it worth people investing in it in terms of building up their own underwriting strength, their underwriting capability? And that’s why we’re now left with five or six specialist insurers that are doing it, in the past we had maybe 15 or 20.
I’m now a consultant, working out there, doing all sorts of different things, and I’m actually trying to get more capacity into the market.
Ian Pritchard
Telematics?
It’s fairly standard now for young car drivers to reduce their insurance premiums by fitting telematics, more commonly known as a ‘black box.’ It’s unheard of in the scooter or bike world (except data logging for race use). However, whilst researching for this article I came across the subject being muted on insurance industry pages.
Andrew Brown-Allan, executive vice president for growth at telematics tech firm, IMS believes there are opportunities for telematics in the bike world. He told Insurance Age that it’s not taken off in the bike market because “Bikers have a culture of wanting to remain untracked.” He went on to say that as insurance prices rise, riders could be tempted by specific types of telematics, he said: “For me it always feels like mileage-based products are a lot more palatable and are a lower barrier to entry for people than a behaviour-based product would be”. He added, “I do think there are aspects of telemetry data that could be helpful in the bike market. Pay-as-you ride is one of them. I think that is definitely a useful product.”
Tips to keep the cost down
Another insurance insider (who didn’t want to be named) gave us this advice for riders:
- Take a full test rather than renewing a CBT every two years. The test will help bring your skill levels up to scratch, which should keep you safer on the road. It’ll also bring your premium down.
- Make sure your machine is safe, don’t park in dodgy areas if you can avoid it and use the best security you can afford.”
- Every single bike insurance claim has an impact on the future and an underwriter’s willingness to take the risk, try to prevent claims!
Have you had problems with insurance?
If you’ve had an issue trying to renew your scooter insurance, or the price has risen dramatically let us know in the comments below. Tell us what you’re trying to insure and where you live as well.
Hi I own a 21 plate piaggio mp3 300 when I bought it from new 1st year I managed to insure it fully comp for not far off £1000 even though I had well over 9 years of no claims on my various 125 cc scooters along with doing 10 cuts over 20 years of riding on a L plate so when I bought my mp3 I used my car licence I assumed with it being brand new I accepted the insurance thinking it would go down the following year also I live in London which I’m sure doesn’t help with the cost so when the 2nd year I was actually going to be charged more I allowed 6000 miles per year but I averaged around 4 but that didn’t bring down the cost so LV offered me a better deal just under 700 a year fully comp then as you know they stopped covering so I’m now with bikesure but I couldn’t get fully comp all I could get was third party only for 820 crazy paying more for 3rd party then I paid fully comp with LV and when my latest insurance was due had the same problem getting fully comp so I’m stuck with bikesure on 3rd party again and I was charged 60 pounds more then last year I spoke to one of there reps asking if I went for my full bike license would that lower the price they said no as they recognised that the car license covers the bike I don’t have a garage but I have five layers of security oxfords chain and lock which is attached to the wall of my house in the front garden disc lock alarmed grip lock also piaggio steering lock along with the factory fitted imoboliser and the bike cover but apparently none of that helps many thanks
** “Given the recent exodus of insurers like AXA from the motorcycle and scooter insurance market, should we consider this a symptom of a larger industry-wide risk aversion or a sign that these insurers are simply unable to innovate and adapt to changing market dynamics? Could this be an opportunity for smaller, more agile insurtechs to fill the void and revolutionize the sector with new, data-driven models?