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AA British Insurance Premium Index – average quoted motor premiums levelling off with a fall of just £2.43 or 0.4%

By 5th April 2016 No Comments
Car insurance premiums stall over first quarter of 2016
  Average £2.40 comes off average comprehensive premiums
  First premium fall for 12 months
  Whiplash still a ‘serious problem for the industry’
  Premiums will ‘continue to rise through 2016’
The latest AA British Insurance Premium Index shows that after sharp premium increases over most of 2015, the average quoted Shoparound premium dropped back slightly.
Last year, premiums rose more than 20%, widely blamed on the continuing whiplash claim epidemic and the November rise in Insurance Premium Tax.
However, the first quarter often see insurers pricing competitively to build market share at a time when, with the new motor registrations, more policies are sold. This has led average quoted premiums levelling off with a fall of just £2.43 or 0.4% (compared with an increase of 10.1% over the previous quarter).
Over the three months ending 31st March, the average quoted Shoparound premium (average of the five cheapest quotes for each ‘customer’ in a nationwide basket of risks) for an annual comprehensive car insurance policy fell to £561.24, from £563.67. Over 12 months however, premiums have risen by 20.7%.
This is still significantly lower than five years ago, when the average Shoparound quote was £622.
Michael Lloyd, the AA’s director of insurance said:
“Despite the small reduction this quarter, these figures suggest that insurers are becoming less willing to offer large introductory discounts to new customers.
“Personal injury claims still dog the industry leading to continuing underwriting losses for some insurers. In February alone (latest figures), over 72,000 notifications were recorded by the Ministry of Justice and I expect that figure to continue rising over coming months.
“Although the government is planning further measures to curb injury claims, it is unlikely that insurers will discount premiums heavily on the assumption that costs will fall any time soon. Past Ministry of Justice-led change did initially reduce claim frequencies and costs, but many insurers are reporting that claims have returned to old levels and beyond.” 
Tim Kelly

Tim Kelly

Tim is a highly qualified Independent Engineer with over 20 years experience as an Engineering Assessor of damaged vehicles.

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