Insurers have reacted to the Chancellor's 2016 Autumn Statement, warning that the “outrageous” 2% increase could lead to increased underinsurance and the change being described as an “unwarranted attack”.
The announcement that insurance premium tax is to rise 2% to 12% in June 2017 was met with anger but not surprise by the insurance sector.
Amanda Blanc, group CEO, Axa UK, said: "This hike - the third in the space of 18 months - represents an unwarranted attack on millions of people simply looking to protect themselves, their families and their key assets.
"This is a classic case of the Government giving with one hand, in the form of whiplash reforms, and taking with another. The affordability of insurance is being fundamentally threatened. The country is already underinsured and ever rising insurance taxation could have the unintended consequence of making this situation even worse."