Airmic response to IPT hike

Airmic has expressed its disappointment in the announcement of yet another rise in Insurance Premium Tax (IPT) announced by the Chancellor in his Autumn Statement. IPT will increase from 10% to 12% from next June.
 
Julia Graham, deputy CEO of Airmic, said:

"This latest rise in IPT is yet another increase in the overall cost of insurance, adding a further challenge for UK business and the insurance industry. As with the previous increase, the timing is especially difficult given that many companies will have already set their budgets for the next renewal season."
 
Ms Graham noted that IPT has now doubled in a short space of time which will start to impact businesses. "Airmic urges the Chancellor to consider the net impact of the incremental increases in IPT, and allow a period of adjustment and stability before considering any further increases." 
 
She warned that the latest rise in IPT risks insurance becoming a price-driven decision which would be bad for UK business. “Insurance is a strategic purchase and cutting corners in cover to save premium could lead to some customers being disappointed when a claim is made and the cover purchased is not up to the job".
 
Airmic believes the higher cost of insurance could also be counter-productive for the Government's policy of fighting cyber crime. "This increase comes at a time when businesses and the insurance industry are grasping cyber insurance covers more effectively, and it would be disappointing to see businesses deterred from taking on additional relevant covers by this increase. This scenario goes against other Government policies designed to encourage UK businesses to get cyber-fit," Ms Graham said.
 
A survey of Airmic members earlier this year placed cyber risk at number one and number two in the risks that most concern member companies.