Some data from Pearson Ham on home insurance trends;
Pearson Ham Group‘s Q1 2024 Insurance Price Index finds that home insurance pricing (for combined buildings and contents) continues its relentless rise, increasing by almost 10% in the quarter to reach £400. This represents an increase of almost 41% compared to a year ago, the highest escalation in pricing since 2019, whereas motor insurance saw the first quarterly average price reduction since 2021.
While all of the main home insurance firms raised their prices, the degree of increase varies substantially by insurer. The highest price increase applied by a leading insurer over the last year was by 69% and the lowest was by 28%. Larger properties bore the brunt of the highest escalated insurance pricing, witnessing a 43% rise over the past year, whereas flats experienced a comparatively lower inflation rate of 37%.
The picture for motor insurance is markedly different with the first quarterly average price reduction since 2021. The Index attributes this shift to a notable decrease of almost -3% in January alone, although the following two months saw slight increases. Further to the reduction in motor insurance pricing in Q1 2024, the average premium paid for private motor insurance is now £618. Nevertheless, motor insurance prices are now around 54% higher than they were two years ago with most of the increase occurring during last year, when prices rose by 47%.
While the decrease in motor insurance pricing will be welcomed by vehicle owners, the picture across the market is nuanced with insurers are applying different pricing strategies. Eight out of ten of the largest motor insurers have decreased their pricing, with one decreasing by as much as -7.2% in the quarter. However, the reduction in motor insurance pricing is not uniform as two of the larger insurance providers opted to increase their motor insurance pricing in the last quarter, with one firm as high as 4.8%.
Regionally, London emerged as the beneficiary of the most substantial decreases in motor insurance premiums, while Scotland grappled with the highest level of premium inflation which remained at 42% higher than this time last year.
Stephen Kennedy of Pearson Ham Group, said:
“The adverse weather conditions experienced in the first quarter caused claims to escalate and for home insurance premiums to surge, compounded by a substantial hike in building materials and labour costs compared to a year ago.
“Conversely, the trajectory for motor insurance premiums has begun to soften, attributed to a stabilisation in the costs of repairs and parts. While motor insurance premiums have passed their highest point, the anticipated timing for lowering of home insurance premiums remains uncertain, indicating a potential prolonged period of elevated costs.”
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