First time in over two years, motor insurance premiums have fallen
In a research carried out by Confused/WTW, car insurance premiums have fallen by 5% in the first three months of 2024.
Although this is good news for the consumer, this has still left the year-on-year cost hike of over 40%.
WTW latest price data was compiled from over six million customer quotes, where the average price came out at £941 which represents £54 less than Q4 in 2023.
Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said the data suggested “the relentless rise in prices may finally be turning a corner”.
As is often the case with car insurance, it was the young people, the first time drivers, who has suffered the most when the price of cover rose in the first quarter of 2024, with the average premium being £2,919.00 which represents a 1% increase.
It was drivers aged 28 that benefited the greatest from the price fall, seeing a 9% quarterly price decrease compared to other age groups. The average premium came out at £1353.00
According to the Association of British Insurers' Premium Tracker, the cost of motor cover soared by 25% in 2023. This rise was mainly contributed by the claims inflation cost, such as body repair centres labour rates which is due to supply and command, the cost of parts and materials, energy cost, plus the second hand car values has also played a significant role. All this together left the worst underwriting losses the industry has seen for a long time.
The Financial Conduct Authority said last year that it is “monitoring” insurance prices and would be forced to step in to ensure insurers take action on fair value policies
Confused.com CEO Steve Dukes said customers are “still paying historically high prices” for their insurance and any decrease in premiums will surely be welcomed by consumers.
Every year insurance premiums are more expensive so as an industry, there’s still an important role to play in helping customers to understand where they could save money.