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UK car insurance premiums continue to rise
Rates rose 3% in Q3.
Staff on October 11, 2016
The average cost of a comprehensive car insurance policy rose by a further 3% in the third quarter of 2016 as insurers continued to bolster prices against claims cost inflation, according to the latest Confused.com Car Insurance Price Index in association with Willis Towers Watson.
Although the latest quarterly price movement represented a slowdown from the 6.5% increase in the previous quarter, the average UK comprehensive premium has increased by over £100 (17.3%) in the past year to £737. Third party, fire and theft policies, while subject to a more moderate 1.7% increase in the quarter, have also risen by over 18%, or nearly £200, in the last 12 months.
“The primary forces behind recent increases are repair costs driven by legal rulings about recoverable expenses together with increasing vehicle complexity,” said Stephen Jones, UK Head of P&C Pricing at Willis Towers Watson, in a release.
The cost of making repairs to increasingly technology-laden vehicles has translated into relatively higher percentage increases for many older drivers, who are statistically more likely to drive higher specification cars and whose accidents can involve a higher proportion of costs relating to vehicle repairs. A large proportion of drivers over 40 have experienced price increases exceeding 20% in the last year. But their premiums still compare very favourably with drivers of 25 and under for whom they exceed £1,000, rising to an average of £2,106 for 18-year-olds.
Nonetheless, 17 and 18-year-olds are the only groups to have received increases below 10% in the past 12 months, thanks significantly to the effect and increased availability of telematics policies at this end of the market. For example, analysis by Confused.com has shown that telematics brands now provide the cheapest quote to 17 to 24-year-olds in over 60% of instances and account for about a quarter of sales to this age group.
UK car insurance premiums continue to rise
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