Revealed – what's happening with car insurance prices in the UK? | Insurance Business UK
Motor insurance premiums in the UK are now the cheapest they’ve been since 2015, according to the latest Confused.com Car Insurance Price Index in association with Willis Towers Watson.
The index shows a decline in comprehensive car insurance premiums both on a quarterly and annual basis. On average, UK motorists are currently paying £538 for coverage. The Q1 figure represents a 7% decrease from the previous quarter; 14% from the same period in 2020.
“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,” said Graham Wright (pictured), UK lead of property and casualty personal lines Pricing at Willis Towers Watson.
“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.”
Across all regions in the UK, it was noted that the cost of comprehensive car insurance fell by a minimum of 4% during the January to March span.
Confused.com chief executive Louise O’Shea, meanwhile, commented: “It’s been just over 12 months since we first went into lockdown and the effects of changed consumer buying habits have been reflected in the sharp drop in insurance premium costs.
“The impact of fewer drivers on the roads has led to fewer claims, which has allowed shoppers to see some of the biggest savings on their car insurance in almost six years. The sensitivity of the current economic climate means that these savings couldn’t come at a better time.”
O’Shea added that the changes to driving behaviour will likely continue for some time even as the country starts to re-open.
Kirkwall, in the Scottish Highlands, is where motorists get covered for the lowest price, with policyholders paying an average of £317 in the first quarter. The most expensive place, meanwhile, is West Central London with premiums at £1,049.
“The easing of COVID-19 restrictions and ongoing pandemic conditions naturally create further uncertainty in pricing for future claims experience,” said Wright.
“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 (Financial Conduct Authority) GI (general insurance) pricing practices remedies at the end of the year. This will cause the uncertainty in market pricing levels to continue for months to come.”