UK polling stations opened their doors this morning and with the first results expected around 11pm tonight, both parties have proposed policies which will impact the insurance industry.
The Labour party manifesto outlines the biggest potential impact with proposals to increase increase insurance premium tax (IPT) on private medical insurance policies to fund free parking for patients, staff and visitors to NHS hospitals. This will see the higher rate, which is currently charged on travel, mechanical/electrical and some motor insurance at 20%, applied to medical policies.
In contrast, the Conservative Party celebrates the current success of the UK financial services industry and their intention to build on this for the future as well as tackling fraudulent and exaggerated whiplash claims to reduce insurance costs on motor policies. With current improvements in telematics within the motor insurance industry, there is potential to collaborate with insurers to utilise this resource effectively to mitigate claims.
Both major parties do agree, however, on the importance of UK export companies securing insurance to promote trade.
Meanwhile, the Liberal Democrats aim to move funding for criminal legal aid away from the tax payer and focus on sources such as insurance policies covering company directors, which suggests a further potential increase in IPT on Directors & Officers liability policies.
The Tory government has already proved tough on the insurance industry over the last eighteen months, with three IPT increases; the most recent increase, as announced in the Autumn Statement 2016, took effect just days ago (1 June 2017), amending the standard rate from 10% to 12%. Following today's general election, the industry could be facing further changes, depending on the outcome.
All 2017 party manifestos, including those parties not mentioned above, can be viewed on their respective websites.