Car Insurance: Will We Stay at Lower Premium Levels?

The trend since Covid lockdowns has been less miles per year, fewer accidents and so lower premiums – but will it last?

Over a quarter (27%) of the five cheapest insurance quotes now come from telematics firms – the highest figure recorded by Consumer Intelligence since the insurance pricing expert started collecting data in October 2013.

Harriet Devonald, Consumer Intelligence’s insurance pricing expert, says: “Take-up of telematics policies has always been higher with younger drivers in a bid to help them get on the road for less, but even this age group are now using the technology more – with 62% of the cheapest five quotes now telematics-based for the under-25s. This is an almost 10% increase since the start of the pandemic.”

This insight comes from the latest Consumer Intelligence Car Insurance Price Index – the independent authoritative source of price movements in the car insurance market, compiled using real customer quotes from price comparison websites (PCWs) and key direct providers.

The index reveals the average cost of car insurance is now 11.4% below pre-COVID levels, with premiums plunging 9.4% in the last 12 months alone. The average motor premium in the UK is now £751.

Last year, the pandemic cut traffic levels – resulting in a large reduction in motor accidents and claims. Yet, it appears that more recently price falls are beginning to stabilise as almost-normal traffic data is being recorded once again – with premiums slipping just 0.9% in the last three months.

Long-term view

Average overall premiums have increased 13.3% since October 2013 when Consumer Intelligence first started collecting data.

Although prices have now fallen almost 20% from their September 2017 pricing peak as COVID-19 continues to push down car insurance prices.

Age differences

All our age groups witnessed similar falls to their car insurance premiums over the last 12 months.

The under-25s (-10.5%) led the way with the biggest yearly decrease, with motorists aged 25-49 (-9.6%) and the over-50s (-8.2%) following closely behind.

Yet while premiums may have fallen the most for younger motorists, insurance costs remain high for the cohort – at £1,589 for a typical annual policy. This compares to £568 for a driver aged 25-49 and just £353 for the over-50s.

“Even with telematics policies working hard to keep pricing affordable, there is still a huge difference between our age groups,” says Devonald.

Regional difference

In the last 12 months, five UK regions recorded double-digit premium drops – the highest fallers being the North East (-13.2%), North West (-10.7%) and London (-10.4%). All UK regions posted significant falls over the 12-month period – the smallest riser being the South East (-7.3%).

When looked over a shorter period, the last three months, again we saw premium decreases in all corners of the UK except for the Eastern region, which gained just 0.3%.

London drivers (£1,265) continue to be the most expensive to insure, with the North West (£984) following in second at a fair distance behind. The South West (£529) remains the cheapest UK region to buy car insurance.

About alastair walker 7389 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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