Car insurance prices fell by more in the three months ending September than in any quarter since 2007, Towers Watson said today.
The consultancy's latest monthly Car insurance price index, published in conjunction with price comparison site Confused.com, found that comprehensive cover premiums fell by an average of 5.1% across the UK last quarter. This means rates have dropped by an average of 10.3% since September 2011.
The drop in premiums last quarter was the biggest since the index began five years ago, and means the average comprehensive premium in the UK at the end of September was £757, compared to £844 a year earlier.
Duncan Anderson, Towers Watson's global pricing and product management leader, said: 'Despite this being the fifth successive quarter of flat or falling rates for comprehensive cover, I think the current scale of the annual and quarterly decreases will - and probably should - cause some pause for thought in the insurance industry.'
Third party, fire and theft cover prices also dropped over the quarter and fell by an average of 2.1% - or £24 - over the 12 months to end of September.
According to the survey, the largest comprehensive cover price decreases were seen in premiums for young drivers - and young women in particular. Comprehensive cover for 17-20 year olds fell by an average of 13.6% in the year ending September, and for women they dropped by 17.3%. Last quarter saw prices for 17-20 year old women fall by 9.1%, and those for men in the same age bracket drop by 7.8%.
Anderson said these cuts reflected 'jostling for position' among insurers ahead of the implementation of the European Court of Justice's ban on gender being used in pricing, which takes effect on December 21.
'Having won more younger driver business, they will seek to retain profitable segments by substituting other factors for gender and minimising the impact of the future price rises that are reasonably anticipated to affect many women in 2013,' he added.
