The latest Willis Towers Watson / Confused.com Car Insurance Price Index is out, and here we give you the lowdown as to which region was hit the hardest and which was nearly spared in terms of increases in comprehensive car insurance premiums.
According to the index, the average premium in the fourth quarter of 2019 stood at £815, which is higher compared to both the previous quarter (£783) as well as the same period in 2018 (£774). It also showed that costs went up across all regions in the UK over the last 12 months.
The biggest annual rise (8%) was seen in Inner London where motorists now pay an average of £1,260, while the Scottish Borders posted the smallest year-on-year hike of 1% to £615 in average premium. Meanwhile the region with the cheapest car insurance, at only £595 on average, is the South West.
“This is the fifth quarter in a row where prices have swung between increases and decreases, showing the market’s ongoing uncertainty around pricing,” said Graham Wright, UK lead of property and casualty personal lines pricing at Willis Towers Watson.
“This uncertainty has been fuelled by many elements, including timing challenges with the Civil Liability Bill implementation. That said, the increases have tended to outweigh the decreases and the recent challenging environment for 1/1 reinsurance renewals on motor excess-of-loss will have done nothing to help insurers keep costs under control.”
Wright added that many of the challenges observed throughout 2019 will persist this year, as cost pressures remain from expensive vehicle repairs, theft claims, last summer’s discount rate change, Brexit-related uncertainty, and IPT (insurance premium tax) increases.
“We are seeing the biggest annual increase in car insurance premiums in two years, and steepest quarterly rise since June 2017,” noted Steve Fletcher, head of data services at Confused.com. “And the scale of these increases shouldn’t be understated.
“The past 18 months have been very volatile, with prices fluctuating before delivering a powerful blow to end the year. And this is a pattern we have seen before, which resulted in premiums increasing a further £100, on average.”
Fletcher continued: “If we see a repeat of this cycle, then we can anticipate prices to exceed £900 in the next 18 months and reach the highest on record. With the current economic uncertainty surrounding the UK, we shouldn’t hope to see an easing of insurance premiums in 2020.”
Compiled using anonymous data from all enquiries submitted on Confused.com, the index analyses prices that are based on an average of the best five quotes received.