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10

Car insurance premiums rise for first time in 12 months

Open-access content Monday 15th October 2018

UK drivers saw their car insurance premiums rise for the first time in 12 months over the latest quarter, according to data from Confused.com and Willis Towers Watson (WLTW).

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The figures show that premiums increased by an average of 1%, or £8, between July and September this year, with motorists now typically paying £760 for annual coverage.

This follows four consecutive quarters of falling premiums since the summer of 2017 when prices peaked at £847, with the latest rise thought to reflect uncertainty around the discount rate.

WLTW head of P&C pricing, Stephen Jones, said ongoing pressures on repair costs also contributed to the increase.

"While this latest rise is minimal, the flattening of the recent dramatic fall in prices provides some comfort for insurers who have weathered an extremely competitive recent market," he said.

"In addition, they face a number of uncertainties that are likely to trouble the market well into 2019, particularly concerning the risk that Brexit will impact the timing of changes to the discount rate."

Despite the latest premium hike, the data, which is based on more than six million customer quotes per quarter, shows that motorists are still paying 9% less than this time last year.

The South West of England saw the greatest quarterly rise in prices at 3%, although these are still the cheapest premiums across the UK at just £566 on average.

Drivers in Northern Ireland experienced the biggest quarterly drop with their premiums falling by 2% to £873 on average.

Males aged 17 to 20 are still paying the most of any demographic at £2,306, but it was female drivers aged 71 and over that saw the biggest price hike in the last quarter, rising by 4% to £424.

And prices are expected to rise further, with Confused.com head of data insight, Steve Fletcher, adding: "Premiums are on the up, and this time starting at a much higher base, which could mean the cost of car insurance could reach new highs."


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This article appeared in our October 2018 issue of The Actuary.
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