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UK car insurance prices slow down in Q1

UK car insurance prices slow down in Q1

UK car insurance prices slow down in Q1
The average cost of comprehensive car insurance in the UK has stalled in the first quarter of 2016 following a year of premium hikes, according to the latest Car Insurance Price Index by Confused.com and Willis Towers Watson.
 
The newest index showed that car insurance prices rose by 14% or £81 over the last 12 months. However, the first quarter of the year saw no changes at all in prices as the average comprehensive premium stood steadily at £671.
 
Third party, fire and theft (TPFT) prices fell very slightly by £1, or 0.1% on average, to £1,128.
 
The first quarter price movements followed annual price rises in 2015 of 13.2% and 16.8% for comprehensive and TPFT cover respectively.
 
Willis Towers Watson said the effect of the rate changes in the past quarter varied considerably between segments.
 
According to the index, young drivers aged 21 and below, excluding 18-year-olds, experienced some of the highest increases in the quarter. Meanwhile, those aged 25 and 55 enjoyed a 2.6% decrease in average price.
 
Regionally, biggest decreases were in the North West of England at 1.7%, while prices increased by over 2% in the Scottish Borders and Central and North Wales.
 
Variations in pricing treatment were more marked at postcode level, with average prices falling by more than 6% in Falkirk while simultaneously rising by over 6% in Galashiels and Kirkwall.
 
Both Willis Towers Watson and Confused.com were not surprised that average motor rates fell flat in the first quarter.
 
“It’s not that unusual for prices to plateau or fall in the first calendar quarter,” said Duncan Anderson, global P&C pricing and product management leader at Willis Towers Watson.
 
 “Indeed, that’s happened in each of the last five years, perhaps in part owing to competition for new car registrations, but most other indicators had been pointing to a continuation of across-the-board rate increases.”
 
Steve Fletcher, head of data services at Confused.com, added that the static prices in the first quarter was expected since insurers regularly cut prices in January, which has a knock-on effect for the remainder of the quarter.
 
“The situation should not be taken for granted. Insurance prices have been rising at a steady pace for the last 24 months, and the last few months are unlikely to be indicators of a period of stagnation,” he said.