1. Policyholders will not report small claims, because they want the no claims bonus, but if the claim is large enough they will report it because they won't be able to cover the costs. So the average claim is expected to increase.
2. Excess will reduce the total claim value for the insurer because the insurer no longer covers 100% of the claim. Claim frequency will decrease because policyholders will not report small claims, i.e. claims for which the cost is less than the excess.