Confused.com/ Towers Watson Car Insurance Price Index
Results of first quarter 2012 released
Car insurance prices have fallen for the first time since late 2008 for comprehensive cover. The cost of comprehensive cover fell by 3.3% in the last quarter, with third party, fire and theft (TPFT) premiums seeing a smaller decrease of 0.4% in the same period.
The Confused.com/Towers Watson Car Insurance Price Index is based on more than 4 million quotes. Today’s report, which looks at car insurance price changes in the first quarter of 2012 and compares with findings recorded in the last five years, reveals:
• The average cost of a comprehensive policy at the end of March 2012 stands at £816, a reduction of £19 over the past 12 months. At the end of 2006, the average cost of a policy was £506.
• Prices vary considerably according to age, with 17-20 year olds paying an average of £2,499 in the first quarter of 2012, while those aged 66 and over typically pay £438. Since the year end, premiums for 17-20 years olds have fallen by £92 and those aged 66 and over by £13.
• 17-20 year old male drivers living in Manchester/Merseyside face the most expensive premiums in the UK paying an average of £5,530 for comprehensive cover. While the cheapest comprehensive cover of £212 is enjoyed by female drivers aged 66-70 in the Scottish Highlands.
• At postcode level, drivers in Oldham, Uxbridge and Bradford have seen the biggest percentage annual increases for comprehensive cover - the maximum increase being 7.1%. Drivers in Galashiels enjoyed the biggest fall in prices in the UK with a decrease of 13%, followed by Inverness (11.6%) and Kirkwall (11.1%).
• Drivers in the Manchester/Merseyside region saw the largest annual increase for the first quarter of 2012 at 3.4%. Only Northern Ireland saw a quarterly increase but even for this region it was only 0.1%.
Duncan Anderson, Towers Watson's Global Pricing and Product Management leader, commented: “After several years of exceptional increases, insurers seem to have addressed profitability issues caused primarily by spiralling bodily injury claims. Whilst this is good news for consumers, claims inflation has not gone away and uncertainty in the market remains. Later this year, the EU ruling outlawing discrimination of premiums on the basis of gender means that insurers will be pushing through a number of changes to their rating structures with resulting rates likely to be volatile for a period, particularly for younger drivers.”
Gareth Kloet, Head of Motor at Confused.com, said: “After several years of significant price increases, the latest index shows a small decline. Whether this is a sustained trend or a blip remains to be seen. With insurance prices up by 32.6% over the last two years, and 53.6% over the last three years, hard-pressed customers would be well-advised to shop around.”
Prices for TPFT, for the first time in over four years, saw a quarterly reduction in premium, falling 0.4% in the last quarter. Over a similar period, the year on year increase for the last year was the smallest at just 3.3%, compared to a high of 57% in 2011. TPFT customers, who typically have a younger age profile, are paying on average £1,158.
The first quarter of 2012 showed a decrease of 3.3% for comprehensive cover. For the first time in over three years, the annual premium change has seen a reduction, reducing by 2.3% in the last year. The average cost of a policy fell by £28 in the first quarter of 2012.
As ever, the pattern of premium changes has not been consistent across the UK. Manchester & Merseyside, Inner London, West Midlands and Leeds & Sheffield regions all saw annual increases for comprehensive cover. The maximum regional increase was for Manchester & Merseyside at just 3.4%.
Several postcode areas saw annual price increases in excess of the rate of inflation, with Oldham, Uxbridge, Bradford and East London all seeing annual increases exceeding 5% for comprehensive cover. A price increase of 7.1% sees Oldham replace Bradford as the postcode with the fastest rising prices over the last 12 months.
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