It’s always good to track the benchmark averages when it comes to insurance premiums, so this info from Pearson Ham is definitely useful for insurers and brokers alike;
Pearson Ham Group has expanded its benchmarking activities to include travel and pet insurance. The methodology applied is the most comprehensive in the sector and reduces bias to provide a more realistic overview of the insurance sector’s personal lines pricing compared to elsewhere. The latest findings from Pearson Ham’s January 2024 Insurance Price Index reveal that premium pricing across personal lines continues to be on the rise, with the exception of the UK motor insurance, which experienced a notable slowdown in premium inflation.
Motor insurance: premium prices decelerate
In motor insurance, premium inflation continued its deceleration in January 2024, following the initial decline observed in Q4 2023. Competitive car insurance prices dropped by an average of -2.7% in January 2024. This means that compared to 12 months ago premium prices are an average 44% higher, a 4% reduction compared to the Q4 year-on-year figure (48%).
Other noteworthy findings include:
– Wales experienced the most significant reductions in motor premiums at -3.1%, while Scotland saw a more modest decrease at -1.8%.
– Lower-value vehicles, priced below £2,000, saw the most substantial reductions at -3.5%, while insurance for vehicles over £20,000 dropped by just -1.7%.
Combined buildings and contents: rises continue amidst harsh weather conditions
Premium pricing for combined buildings and contents policies continued their upward trend, rising by 3.4% in January 2024, driven by harsh weather conditions, meaning that prices in January 2024 were 41% higher than this time twelve months ago.
Key insights include:
– Larger properties with four bedrooms experienced the most significant increase, up by 44% year on year.
– Home insurance for flats increased by 38% year on year.
Travel insurance: upward trend in policy prices
Annual multi-trip policy prices increased by 3.1% in January 2024, while single-trip travel insurance saw a 1.2% increase, continuing the upward trend observed in Q4 2023 (5% increase).
Notable points include:
– Couples experienced the most significant single-trip increases, with prices rising by 2.6% throughout the month.
– Individual, single-trip travellers were unaffected by January increases.
Pet insurance: lifetime cover prices surge
Prices for Lifetime cover, the most popular form of pet insurance, have surged by 17% compared to the same time last year, boosted by a 1.5% increase in January.
Key findings include:
– There are regional differences, local veterinary pricing playing a part. The North East witnessed the most substantial price rises at 25% year on year, while the West Midlands saw a more modest increase at 15%.
– Pet insurance for dogs is now 19% higher than the same time last year, with cat insurance up by 11%.
“As we expand our benchmarking activities to include travel and pet insurance, our January Insurance Price Index confirms that following an unprecedented phase of surging premiums, motor insurance premiums are being reduced by most insurers.
“However, the remainder of 2024 will be challenging for insurers. Recent weather-related events and other significant pressures have sustained the upward trajectory in pricing for combined buildings and contents, travel, and pet insurance. How long this will continue to remain is difficult to determine but we expect more clarity by the end of this quarter.”
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