Comprehensive motor insurance prices have risen for the first time in three years, according to Towers Watsons latest Car Insurance Price Index.
The index, which the actuarial firm produces together with confused.com, showed the average price of a comprehensive policy rose to £582, an increase of 0.4%. This was the first price increase seen in comprehensive cover since the middle of 2011.
Young drivers under 25 saw the largest and most consistent increase in the quarter - drivers aged 19 or 20 saw premiums jump by 3%. In contrast, drivers in their mid-40s enjoyed price cuts, ranging from around 1% up to 2.8%.
The index also showed that premium increases were concentrated on sole driver polices, which saw an average increase of 1.8%, whilst prices for multi-driver polices continued on a downward trend.
This latest quarter provided 'a real mixed bag' pricing changes making it difficult to call how and in which general direction prices might move next, said Stephen Jones, UK head of property and casualty pricing at Towers Watson.
He also predicted that the competition watchdog’s decision to back-track on plans to cap replacement car costs and repair charges was likely to have an effect on premium prices over the next quarter.
He said: 'One additional factor to take into account will be insurer reaction to the Competition and Market Authority decision at the very end of the third quarter not to address the issue of temporary car replacement costs. Some insurers may have been anticipating favourable reform to support premium rates impacted by general inflationary pressures.'
Regionally, the average comprehensive premiums grew in 13 of the 16 Scottish postcode areas, with the highest quarterly increases seen in the Dundee and Galashiels areas. By contrast, drivers in Northern Ireland and across most of Wales saw modest price reductions in the quarter.
In England, increases and decreases were more evenly spread, but a majority of areas experiencing increases. Drivers in the south of England, for example, saw an average quarterly increase of 2.8%.
