ARVAL, with sister company Greenval Insurance, has announced that it will be absorbing the November 2015 increase in Insurance Premium Tax (IPT) on its motor insurance products for customers such as its Arval insured fleet lease clients.
This means that new or existing customers ordering an insured vehicle from Arval before 1st November will not incur the 3.5% Government-imposed increase in their monthly fees.
Arval, in conjunction with Greenval Insurance, offers two motor insurance products. Arval Total Care is Arval’s optional package allowing customers to opt for an insured lease vehicle.
A first in the UK market, the full package includes contract hire with third party insurance, own damage protection, glass damage protection, maintenance management, breakdown assistance and accident management.
The Fleet Insurance Policy allows customers to insure their entire vehicle fleet simply and cost effectively, including those cars and vans that are not funded by Arval.
In the July Budget, Chancellor George Osborne announced that the standard rate of IPT will increase from 6 per cent to 9.5 per cent on 1st November this year. This will mean higher premiums across a whole range of personal and business insurances, from home and life insurance to motor insurance.
Arval has decided to shield customers from this increase at a time when premiums across the motor insurance sector have already increased by 5.5% in the past 12 months according to The AA’s British insurance premium index.
Several organisations have also raised concerns at the increase in IPT, and particularly the impact on smaller businesses.
John Allan, national chairman of the Federation of Small Businesses, said: “Small firms are worryingly under-insured. Little more than half (56%) of small businesses have business continuity insurance, and just 48% of small businesses on a flood plain have property flood insurance.
“The rise in IPT will do little to incentivise these businesses to seek insurance, and in the worst cases give them more reason to avoid it.”
Elliott Woodhead, director of SME & Partnerships, said: “At a time when the premiums on a whole range of insurances are likely to increase, we are keen to give our customers some respite and certainty in relation to their company vehicle costs.
“As a result of this announcement we expect to see increased demand for our products as we get closer to the 1st November implementation date.”