Photo: Vauxford/CC
Photo: Vauxford/CC

Alex Smith, Liverpool Socialist Party

If you ask anyone who has recently had to renew their car insurance about how much they had to pay, they’re likely to explode in anger. UK motorists are now being quoted, on average, a record sum of almost £1,000 for their annual policies (in London the average price is even higher at £1,607). This is an eye-watering 58% increase compared to the previous year.

Young people are particularly hard hit. 17-year-old new drivers, now pay an average of £2,877, nearly double last year’s cost!

Where is the money going?

Insurance firms and the Financial Conduct Authority claim that the growing cost of repairs has caused price hikes. But a number of insurance experts have poured scorn on that excuse, and pointed out that the real issue is the insurance firms’ pursuit of profit. One, speaking to the Independent, said: “There is a lot of smoke and mirrors going on. Through Covid, insurers made massive profits. Now we have come out of Covid into a very different economic climate, insurers want their profit and are not absorbing the increased cost of inflation.” We say, open the financial books to scrutiny from trade unions and workers’ representatives to show where the money is going.

We already know one place it is: executives at the top five motor insurance firms have been given six- and seven-figure salaries and bonuses. Admiral Group reportedly gave a total of £2.15 million to its chief executive and £1.23 million to its chief financial officer. Meanwhile, Aviva’s chief executive is reported to have got £5.52 million.

These fatcats can’t be trusted not to rip us off. Banks and insurance firms should be nationalised, under democratic workers’ control, with compensation paid to shareholders only on the basis of proven need. Banks and insurance firms can then operate within a democratically planned economy, based on a socialist plan of production – in which investment in high-quality public transport and green technology would reduce the reliance on personal cars – and where working-class people’s needs are prioritised, not bosses’ profits.