Motor

UK car premiums drop 14% in 12 months

According to the latest Confused.com Car Insurance Price Index, this is the largest annual drop since 2014 and the fourth largest decrease in 15 years since the index’s launch

Car insurance premiums in the UK have fallen by 14% over the last 12 months, according to the latest Confused.com Car Insurance Price Index.

This represents the biggest annual drop since 2014 and the fourth largest decrease in 15 years since the index’s launch.

Currently, premiums are now the cheapest they have been since 2015, after dropping by 7% (£37) in the first quarter of 2021.

In the first three months of 2021, the cost of comprehensive car insurance fell across all regions in the UK by at least 4%.

Graham Wright, UK lead of P&C Personal Lines Pricing at Willis Towers Watson, said: “The scale of the reduction in premiums seen over the last quarter reflects the realities of notably better claims experience under successive Covid-19 lockdowns.

“The measures have continued to have an impact on the number of drivers on the road – particularly learners – and the miles driven, leading to fewer claims.”

He added: “The easing of Covid-19 restrictions and ongoing pandemic conditions naturally create further uncertainty in pricing for future claims experience.

“However, the bigger forward-looking challenge for insurers and intermediaries alike is the pricing action needed in the run up to the implementation of the FCA’s GI Pricing Practices remedies at the end of the year. This will cause the uncertainty in market pricing levels to continue for months to come.”

 

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