Author: Emmanuel Kenning
Source: Insurance Age | 14 Jan 2016
Categories: Insurer, Broker
Tags: motor | personal lines | IPT
Research cites higher repair costs and IPT rise.
Comprehensive car insurance premiums rose 6.9% in the final quarter of 2015 according to research by Confused.com in association with Willis Towers Watson.
The Car Insurance Price Index revealed that the motorists now pay on average £78, or 13.2%, more than one year ago – the biggest annual rise recorded by the Index since 2011.
The findings were based on price data compiled from almost two million customer quotes and showed that the average premium for an annual comprehensive car insurance policy has now reached £672.
Annual increase
The cost of third party, fire and theft policies has risen at a similar pace, with prices also going up by 6.9% in the last quarter, increasing the average quoted premium by £73 to £1129 – an annual increase of 16.8%.
The rises have reversed three years of falling premiums.
Stephen Jones, UK head of P&C pricing at Willis Towers Watson, said: “The recent increase to Insurance Premium Tax along with inflationary pressures on claims costs, especially to vehicle damage repair costs, have been the major factors driving up prices.
“Even though improved vehicle safety features will very likely reduce claims frequency in the longer term, the immediate effect of installing expensive accident avoidance technology – often positioned in those parts of the car most vulnerable to impact damage – is higher repair costs.”
Young drivers
Younger drivers aged between 17 and 20 benefited from the lowest increases in the last 12 months, with female drivers in this age group experiencing annual price rises of 3.9% to £1558 for comprehensive car insurance.
Almost every other age group faced double-digit increases, with female drivers aged over 71 hit hardest with a 19% annual rise in prices to £360.
The cost of comprehensive car insurance rose across all regions, but drivers in Northern Ireland were worst off with their insurance premiums rising on average by 18% over the last year, an increase of £125 to £810.
Tumultuous ride
Steve Fletcher, head of data services at Confused added: “Last year gave motorists a tumultuous ride, hitting them with consistent price rises and an increase in Insurance Premium Tax, both of which would have considerably dented their pockets. We’re now in a position where average premiums are at the highest we’ve seen them since mid-2013.
“Unfortunately for motorists, we’ve now seen 11 consecutive months with no premium decreases, which would suggest that the trend is likely to continue. If this is to be the case, we would expect the average comprehensive cover premium to soon exceed the £858 per year high we saw during 2011.”
Source: Insurance Age | 14 Jan 2016
Categories: Insurer, Broker
Tags: motor | personal lines | IPT
Research cites higher repair costs and IPT rise.
Comprehensive car insurance premiums rose 6.9% in the final quarter of 2015 according to research by Confused.com in association with Willis Towers Watson.
The Car Insurance Price Index revealed that the motorists now pay on average £78, or 13.2%, more than one year ago – the biggest annual rise recorded by the Index since 2011.
The findings were based on price data compiled from almost two million customer quotes and showed that the average premium for an annual comprehensive car insurance policy has now reached £672.
Annual increase
The cost of third party, fire and theft policies has risen at a similar pace, with prices also going up by 6.9% in the last quarter, increasing the average quoted premium by £73 to £1129 – an annual increase of 16.8%.
The rises have reversed three years of falling premiums.
Stephen Jones, UK head of P&C pricing at Willis Towers Watson, said: “The recent increase to Insurance Premium Tax along with inflationary pressures on claims costs, especially to vehicle damage repair costs, have been the major factors driving up prices.
“Even though improved vehicle safety features will very likely reduce claims frequency in the longer term, the immediate effect of installing expensive accident avoidance technology – often positioned in those parts of the car most vulnerable to impact damage – is higher repair costs.”
Young drivers
Younger drivers aged between 17 and 20 benefited from the lowest increases in the last 12 months, with female drivers in this age group experiencing annual price rises of 3.9% to £1558 for comprehensive car insurance.
Almost every other age group faced double-digit increases, with female drivers aged over 71 hit hardest with a 19% annual rise in prices to £360.
The cost of comprehensive car insurance rose across all regions, but drivers in Northern Ireland were worst off with their insurance premiums rising on average by 18% over the last year, an increase of £125 to £810.
Tumultuous ride
Steve Fletcher, head of data services at Confused added: “Last year gave motorists a tumultuous ride, hitting them with consistent price rises and an increase in Insurance Premium Tax, both of which would have considerably dented their pockets. We’re now in a position where average premiums are at the highest we’ve seen them since mid-2013.
“Unfortunately for motorists, we’ve now seen 11 consecutive months with no premium decreases, which would suggest that the trend is likely to continue. If this is to be the case, we would expect the average comprehensive cover premium to soon exceed the £858 per year high we saw during 2011.”
