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07

Average car insurance premiums back below £700

Open-access content 17th July 2013

Average quoted comprehensive motor insurance premiums fell by nearly 8% in the second quarter of 2013, according to the Confused.com/Towers Watson Car Insurance Price Index.

That took the average comprehensive premium in the UK to under £700 for the first time since the middle of 2010. This was the sixth consecutive quarter in which prices have fallen, resulting in a 14.9% price reduction in the last year.

Third party, fire and theft prices also fell by 5.2% in the quarter, and by 3.5% in the last year.

Duncan Anderson, Towers Watson global head of pricing and product management, said: 'The main reason that would logically explain downwards price movements of this quarter's magnitude is that insurers are expecting to see significant claims and legal cost savings as a result of the Legal Aid, Sentencing and Punishment of Offenders (Lapso) Act.

'Other factors include the promised action to curb spurious whiplash claims and the growing number of telematics quotes being requested.'

He added: 'The early signs coming through from the Ministry of Justice portal since April are that there will be a reduction in personal injury cases, but the rate changes seen in the last quarter still represent rather an optimistic outlook from insurers.'

The survey found that young drivers benefited most from the last quarter's decreases, with male drivers aged 17-20 receiving average premium decreases of over 30% in the last 12 months.

Young women had seen two quarters of price rises ­- almost certainly caused by the impact of the European Gender Directive - the organisations said, but had now benefited from an 11.6% quarterly price cut.

 

This article appeared in our July 2013 issue of The Actuary.
Click here to view this issue
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Topics:
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