General Insurance Article - UK car insurance premiums fell by 12.5% in 2013


 The average cost of a new comprehensive car insurance policy fell by 12.5% in 2013 to £644 according to the latest Confused.com Car Insurance Pricing Index, in association with Towers Watson. Price reductions for third party, fire and theft (TPFT) cover were slightly more subdued, but still resulted in average annual savings of 7.5% (£85).
 
 Overall market prices continued to fall in the fourth quarter, but at a much lower rate than in previous quarters, reflecting repeated calls from within the industry for greater underwriting discipline after two solid years of price cuts. Across the UK, the average cost of a new comprehensive policy fell by 1.1% between October and December 2013.
 
 With such a minimal UK-wide average price reduction in the quarter, some consumer segments saw small increases in their average premiums in the final quarter. These included some traditionally lower-risk segments such as policyholders aged between 66 and 70, and those resident in the Scottish Borders. Notably, men as a group received a small increase in average premium of 0.9% in the final quarter, the first quarterly increase for two years.
 
 Largely as a result of the Gender Directive implemented in December 2012, young men were the biggest winners from comprehensive price reductions in 2013, with 17-20 year olds seeing their premiums fall by 24%.However, young women, who initially suffered from rising prices due to the anticipation and introduction of gender neutral pricing, have also benefitted from a generally soft market in 2013. Comprehensive cover prices fell by over 12% and 14% respectively for 17-20 and 21-25 year old females during 2013.
 
 Stephen Jones, UK general insurance pricing leader at Towers Watson, commented: “There is growing evidence of a turning-point in the pricing cycle, with the rate of price reductions reduced considerably relative to earlier quarters, and some segments seeing modest premium increases. This suggests that the underwriting discipline called for following previous rate reductions is returning to the market, with insurers becoming more selective in their pricing strategies and with gender-neutral pricing bedded-down 12 months after its introduction. Rate increases biased towards traditionally low-risk customer groups suggest that the recent LASPO reforms are delivering the expected structural pricing changes.”
 
 Gemma Stanbury, Head of Motor at Confused.com, commented: “Comprehensive car insurance prices have fallen by 12.5% in the last year, bringing premiums to an average of £644. These falling prices are welcome news for motorists; however the latest car insurance price index highlights that price rises could be on the horizon with some males already experiencing price hikes in the last quarter.”
  

Back to Index


Similar News to this Story

IPT receipts for 2024 to 2025 hits over GB7bn in January
According to this morning’s HMRC data, Insurance Premium Tax (“IPT”) receipts stood at £853 million in January 2025, bringing the 10-month total for t
Unlocking the potential of IFRS17 insights and opportunities
As mentioned in part one of this blog series, IFRS 17 has reshaped financial reporting for insurance contracts since its implementation on 1 January 2
Lack of expertise main barrier to AI adoption in insurance
A lack of expertise within insurance companies is the biggest challenge to implementing artificial intelligence (AI) technology. As AI has the potenti

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.