Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
Quick links:
  • Home
  • News

UK motor insurance prices fall to four-year low

Open-access content 28th July 2020
web_car_travel_istock-980117574.png

The average price for comprehensive motor insurance in the UK has fallen to its lowest quarterly level in four years, the Association of British Insurers (ABI) has found.

The ABI's data shows that the average price for motor insurance was £460 in the second quarter of this year, down 3% on the first three months of 2020.

Year-on-year, the average premium fell by 2% to stand at its lowest level since the third quarter of 2016, reflecting a steep reduction in traffic during the COVID-19 lockdown.

“However, continued cost pressures, including rising repair bills and the delay in introducing personal injury reforms, mean that motorists will need to continue to shop around to get the best deal for their needs,” said Laurenz Gerger, ABI’s general insurance policy adviser.

The ABI's figures relate to the price consumers pay for their cover, rather than the price they are quoted.

Separate analysis by Willis Towers Watson (WTW) suggests that car insurance prices fell by 5% in the last quarter, which would be the largest quarterly drop since early 2018.

The company recorded a sharp fall in the number of new drivers on roads, which it said reflects a reduction in new vehicle purchases, furloughing of young customers, and the postponement of driving tests.

There were also changes in the type of quotes that people were requesting. For example, customers who might typically be 10,000 mile-per-year drivers were seeking quotes at lower mileage levels.

“Insurers are attempting to predict claims and adjust prices before the full impact of COVID-19 on both medium and long-term frequency and severity trends is known,” said Graham Wright, WTW's UK lead of P&C personal lines pricing.

“Whilst there are trends that simultaneously point to both higher and lower levels of driving than before – such as less use of public transport balanced with more working at home – a further headache is estimating the impact on severity from broken repair supply chains, more cyclists on the roads and recessionary trends. 

“These are just some of the moving parts that will make pricing risk correctly even harder than before the COVID-19 crisis – meanwhile all of the challenges from before such as whiplash reforms, inflation and Brexit remain.”

 

Author: Chris Seekings

Image credit: iStock

Also filed in:
News
Topics:
General Insurance
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

GI Model development contractor

£700 - £1000 per day
Reference
119012

Pricing Actuary - Marine, Credit, Aviation

London (Central)
Total package circa £230K
Reference
119011

Capital Modelling Actuary

London, England
£70000 - £100000 per annum
Reference
119010
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2020 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200