Companies offering
life insurance have expressed relief as such policies were not hit by insurance premium tax (IPT) in last week's Emergency Budget.
Several policies - such as
motor insurance,
travel insurance and buildings and contents insurance – will be affected by IPT.
However, life insurers managed to escape the tax, which some in the industry feel will protect sales of such products.
Munich Re head of marketing Andy Milburn says: "Our position as a group is that we really do not like the insurance premium tax because we think it stops people buying insurance.
"We do not like the tax in totality but we are glad that it has not been extended to
life insurance."
It is thought that the higher rate of insurance premium tax – which will rise from 17.5 per cent to 20 per cent in line with the increase to VAT - could prove to be problematic for private medical insurance
British Insurance Brokers’ Association chief executive Eric Galbraith said his organisation is concerned that rising premium prices as a result of IPT could lead to "further underinsurance".
