Motor insurer Admiral has pledged to hand back £110 million to car and van policyholders as claims plunge amid the coronavirus lockdown.
The Cardiff-based group said it will pay out £25 for each of the 4.4 million vehicles covered at April 20, with refunds being made by the end of May.
It said it is able to give customers the cash thanks to falling claims as fewer drivers are on the road due to Covid-19 restrictions.
The group also pledged another £80 million towards lowering prices for cover to reflect the drop in claims, as well as for further initiatives to support NHS staff and local communities.
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 in the number of claims we are seeingCristina Nestares, Admiral
This includes waiving all motoring claim excess fees for NHS or emergency service workers, and guaranteeing cover for customers using their vehicle to transport people, deliver medical supplies and equipment, or items to people who are self-isolating.
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 in 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.”
The group added that the £190 million committed is equivalent to roughly a month’s premium income, or a third of its 2019 profits.
It stressed that it has not furloughed any of its staff and continues to pay them their full salary.
It comes as figures on Monday showed that motor insurance premiums have fallen by 1% – or £6 – on average in the first quarter.
But the data from Confused.com and Willis Towers Watson also found there was little evidence of an overall pricing trend amid the uncertainty over the length of the lockdown.
Consumer group Which? called for other insurers to follow suit and offer policyholders rebates and premium price cuts.
Gareth Shaw, head of money at Which?, said: “People will remember how businesses treated them during this crisis and 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.”