UK Car Insurance Premiums Increase By 6% As Industry Is Facing A “raft of challenges”: WTW
UK Car Insurance Premiums Increase By 6% As Industry Is Facing A “raft of challenges”: WTW
According to research from WTW and Confused.com Car Insurance Price Index, comprehensive car insurance premiums have grown by 6 percent (£32) over the past year, with the average UK motorist now paying £554 on average.
Recent data from broker WTW shows that the average cost of a UK vehicle claim would grow to £5349 in 2021, up from £5037 the year before.
ALSO, READ Term Life Insurance – Meaning, Types & Benefits
Since the new FCA pricing rules went into effect on January 1st, 2022, prices for auto insurance have increased year over year for the last two quarters.
With a 1% (£4) increase in the last three months, car insurance prices have now gone up for the third consecutive quarter.
Drivers in Outer London suffered a 3 percent (£17) increase in comprehensive vehicle insurance premiums from April to June 2022, with typical premiums now costing £704.
UK Car Insurance Premiums Increase By 6%
In contrast, drivers in the South of England saw their insurance premiums fall by 1% to £437, which is the largest quarterly decline.
The cost of living in Inner London has risen by 2% (£18) in the last three months, making it the most expensive region in the UK.
ALSO, READ Understanding Car Insurance: The Cost and Policy Coverage
In terms of average premium costs, Manchester and Merseyside (£701) are just significantly less expensive than Outer London (£704) on average.
The South West of England (£373) and the Scottish Borders (£366) are the two regions with the lowest average annual auto insurance premiums in the United Kingdom.
Furthermore, rates for drivers in Enfield, Motherwell, and Lancaster saw the largest quarterly increases of 4%, bringing their average premiums to £730, £490, and £425 correspondingly.
The most expensive postcode in the UK is still West Central London (1,046, £1,046). On the other side, Llandrindod Wells in Wales remains the cheapest town in the UK, with drivers paying an average of £339 for comprehensive vehicle insurance in the second quarter of 2022.
ALSO, READ Koffie Insurance Raises $11 Million To Foster Expansion And Growth
UK Car Insurance Premiums Increase By 6%
Further data shows that female drivers aged between 17 and 20 saw the greatest quarterly increase of just over 3% (£32), taking their premiums to £1,076, followed by male drivers aged 71 and over, who are now paying on average £404 after a 3% shift in prices (£11) in the second quarter of 2022.
But, male drivers aged between 17 and 20 are still paying the most out of any demographic, as they are now paying on average £1,511.
Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW, said: “A combination of rising accident frequency after the pandemic lull and surging inflation sees upwards pressure on insurance prices coming from claims costs and repairs. These challenges are compounded by insurers also having to respond to the FCA’s pricing reforms, effective from January, which bans renewal prices being higher for existing customers than for new business.”
ALSO, READ A Study On Why Many Nigerians Are Not Insured – Researc
He continues: “Motor insurance prices have yet to skyrocket, despite the cost pressures, and remain fairly low by historical standards. Looking ahead, the picture is more mixed with the industry facing a raft of challenges over the second half of 2022 and into 2023. With premium rates well below the level needed to keep up with inflation, which is surging at its fastest pace in 40 years, insurers are bracing themselves for rising costs, such as more expensive repairs due to increasingly sophisticated vehicles, and ongoing supply chain issues forcing longer repair times.”
UK Car Insurance Premiums Increase By 6%
Louise O’Shea, CEO at Confused.com, commented: “While they may not be the most expensive prices on record, we are now seeing some of the highest car insurance premiums in close to two years. This was to be expected, after a period of extremely low prices during COVID-19. However, with the current economic situation being faced by both businesses and consumers, I have no doubt we have another turbulent period ahead of us.
ALSO, READ CBN’s RT 200 Has Generated $600 Million In 6 Months
“There is an opportunity now for insurers to be as competitive as possible with their pricing, as consumers look to make savings wherever possible. And it’s important that as an industry we are helping our customers to find these savings.”
The current inflation event is impacting many different motor insurers, with Sabre Insurance Group, recently reporting that it has weighed heavily on its results for the first half of the year
AllInsuranceHUB is a blog for everyone who seeks an informative, educative, and knowledge-based online insurance and investment community. We share Biographies, Top-notch investment tips, finance news, insurance policy details and much more. You can read and share thoughts, ideas, and opinions on the finance market and get real-time updates from around the globe.
