Auto insurance prices post steepest annual decline in seven years
UK car insurance prices fell 16% from the third quarter of last year, the biggest annual decline since 2014, according to research from Willis Towers Watson (WTW) and Confused.com.
This means motorists now pay £ 514 on average for full car insurance, down £ 97 from 12 months ago, with premiums now the cheapest since mid-2015.
Based on pricing data compiled from nearly six million customer quotes per quarter, the results show that premiums have now declined for six of the past seven quarters, although the rate of decline has slowed between July and September from This year.
Stephen Jones, head of UK property and casualty insurance advice at WTW, said the downward trend in prices was mainly due to declining claims during the COVID-19 pandemic.
However, he added: “The Financial Conduct Authority’s price-treading ban from January 1, 2022 received considerable senior management attention in 2021 and consumed significant amounts of insurers’ pricing resources.
“The impacts of these efforts on prices will become apparent in the months to come. With widespread supply chain issues affecting many industries, including auto repair, the price outlook for 2022 is extremely uncertain. “
From July to September 2021, the cost of comprehensive car insurance fell in all parts of the UK – and by 2% on average – with the exception of South West England, which saw its premiums increase by 1%.
Drivers in the Manchester / Merseyside area benefited from the biggest quarterly price drop, with insurance premiums falling on average 4% to £ 646.
Central West London remains the UK’s most expensive place to buy car insurance, with drivers now paying an average of £ 977. At the other end of the scale, the cheapest town is Llandrindod Wells in Wales, which now pays an average of £ 307.
Despite the drop in prices, Louise O’Shea, CEO of Confused.com, said premiums may start to rise as people spend more time traveling on the road and accidents increase.
“We are already starting to see this in parts of the UK, and it will mean that the overall price of insurance will go up, which means the cost of renewing will also go up,” she continued.
“Starting in January, there will be significant changes in the way insurers price customers, and the concern is that customers accept a fixed or slightly lower price and simply choose to renew.
“But the savings currently on offer show that insurers are prepared to give consumers a better deal, and even if the market changes, this model is likely to stay.”
Image credit: iStock
Author: Chris Seekings