The ABI’s Tracker is the only survey that looks at the price consumers actually pay for their cover, rather than the price they are quoted.
According to the latest Tracker, in the fourth quarter of last year:
The average premium paid for private motor was £470 up 8% on the previous quarter. The current average premium is 7% higher compared to Q4 2021,
Rising costs for insurers continue
Examples of increasing cost pressures cited by some ABI members include:
Energy inflation adding £71.75 to each repair.
Average paint and material costs have increased by nearly 16%.
Comparing 2022-Q3 with 2021-Q3 the average paint cost on repair has increased by 20%.
An estimated 40% of all work is now being affected in some way by parts delays.
Courtesy car costs to repairers are increasing at around 30%.
In addition, the average price of second-hand cars increased by 19% in the year ending July 2022, (source: Auto Trader)
The impact of the FCA pricing reforms
The FCA introduced new rules on the pricing of motor and home insurance on 1 January 2022. These ensure that the price paid by renewing customers for motor and home insurance is no greater than the price charged to an equivalent new customer for the equivalent policy bought through the same distribution channel, such as insurer, broker, or price comparison website. However, they do not set or cap the level of premium paid by new or existing customers. The price of cover will continue to reflect a range of factors, including the cost of settling claims.
The average price paid for a new policy during the fourth quarter of 2022 rose by 7% (£37) on the previous quarter to £531, a record high. The average price paid on renewal of an existing motor policy increased 8% (£31) to £428.
However, taking 2022 as a whole the average price paid to renew an existing policy fell by 7% on the previous year to £392, while the average price paid for new cover rose by 11% to £500. The changes during the year in part reflected the introduction of the pricing rule changes
Jonathan Fong, Senior Policy Adviser, General Insurance, said: “Every motorist wants the best insurance deal, especially when coping with cost of living pressures, and insurers continue to do all they can to keep motor insurance as competitively priced as possible. Yet, like many other sectors, insurers continue to face higher costs, such as more expensive raw materials, which are becoming increasingly challenging to absorb.
“Anyone concerned about being able to continue paying their motor insurance premium should speak to their insurer about any alternative payment options that may be available.
|
