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
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • January 2014
01

ABI: car insurance premiums continue to fall

Open-access content Tuesday 28th January 2014 — updated 5.13pm, Wednesday 29th April 2020

The average cost of a comprehensive motor insurance policy decreased to £370 in 2013, 9% down on the previous year, the Association of British Insurers said.

According to the ABI, this average cost reflected a downward trend in the average premium paid over the past eight quarters from £415 in the first quarter of 2012 to £370 in the fourth quarter 2013, a drop of £45 or 11% per policy.

Current premium levels, collated by ABI's quarterly average motor premium tracker, are based on data from the association's members who represent around 90% of the UK private car insurance market.

James Dalton, ABI's head of motor insurance, said: 'The 9% fall in the average comprehensive motor premium last year shows that insurers are fulfilling the commitment they made to the government to pass savings from changes to the civil litigation system to hard-pressed motorists through lower car insurance premiums.'

However, he added that more needed to be done to get premiums even lower and urged the government to press ahead with tackling exaggerated and fraudulent whiplash claims.

Meanwhile, AA Insurance's latest Premium Index said over £100 had been slashed off car premiums in just two years.

The insurer's figures, which cover the last three months of 2013, showed further falls in the cost of car insurance, continuing the downward trend that started during the first half of 2012. But the firm predicted that the 'boon for motorists, will soon end'.

Director of AA Insurance Simon Douglas said: 'These record falls come despite continuing rises in the cost of personal injury claims and reinsurance costs.'

Echoing Dalton's statement, Douglas too pointed out that falls in premiums were a combination of 'both the fiercely competitive nature of the market as well as the anticipation that law changes will weed out costly fraudulent whiplash injury claims'.

But he noted that that over recent year's court awards for those seriously injured in car crashes had increased.

'The industry is seeing more multi-million pound lump sum payments for those who have suffered life-changing injury as well as periodic payment orders [PPOs] which guarantee regular payments for life,' he said.

'These have led reinsurers to increase their rates by up to 30% and some of that will find its way to premiums paid by motorists.'

 

This article appeared in our January 2014 issue of The Actuary.
Click here to view this issue
Filed in
01
Topics
General Insurance

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Catastrophe Modelling Analyst - London Market Broker

London, England
£40000 - £50000 per annum
Reference
145925

Senior Catastrophe Analyst

England, London
£65000 - £75000 per annum
Reference
145924

Life Actuary - Financial Reporting - Day Rate contract

Negotiable
Reference
145923
See all jobs »
 
 

Today's top reads

 
 

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

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
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

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ