Car Premiums Soften Slightly, Says Confused.Com Data

The latest car premium tracking data from Confused.com and WTW for you;

Comprehensive car insurance premiums have fallen by 2% (£21) between July and September 2024, with UK motorists now paying £861 on average, according to the latest Confused.com Car Insurance Price Index in association with WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.

Following a two-year-long upward trajectory in prices, car insurance premiums have now decreased for three consecutive quarters following price falls of 5% (£54) in the first three months of 2024 and 6% (£59) in the second quarter.

Car insurance premiums also recorded their first annual decrease since 2021 of 7% (£63), according to the longest established and most comprehensive car insurance price index in the UK. The index is based on price data compiled from over six million customer quotes per quarter.

Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW, said: “Insurers have felt able to continue the reducing trend in premiums supported, in particular, by benign claims frequency experience for most of 2024. This reflects a basket of influences, including action on reducing speed limits, the increasing maturity of workers’ hybrid working arrangements, and consumers increasingly choosing slightly higher policy excesses to reduce their insurance costs.

“The rate of premium reduction seen earlier in 2024 has abated somewhat reflecting continuing high inflation rates on some types of claim, including total loss settlements, mixed personal injury claims and injury general damages, and claims arising from recent episodes of extreme weather.”

Most regions across the UK recorded price falls over the last three months. Drivers in Outer London saw the largest percentage decrease in the cost of comprehensive car insurance, with a quarterly fall of 4% with average premiums now costing £1,104. While most regions experienced price decreases ranging between 1% to 4%, South West England, West England and Central and North Wales bucked the downward trend where premiums remained unchanged during the third quarter.

Despite prices in South West of England remaining flat for the last three months, it continues to be the cheapest region for car insurance with average premiums at £571 (0%). Reflecting the wider national trend, car insurance premiums in Inner London fell by £47 (3%) in the third quarter. However this still remains the most expensive region with average prices at £1,357.

The West Midlands region remains the most expensive area outside of the capital, with average premiums falling by 1% (£14) in the last three months and now costing £1,068, closely followed by Manchester / Merseyside (£1,052).

More locally focused data shows motorists in the Isle of Man experienced the greatest quarterly fall of 9%, making it the least expensive location in the UK with prices on average now costing £469. West Central London continues to be the postcode area with the steepest prices in the country where drivers now pay an average bill of £1,738.

Drivers aged 70 benefited from the greatest price fall compared to other age groups, seeing a 7% (£32) quarterly price drop. This reduces their average premiums to £454 and, as a result, drivers in this age band are now paying the least for their car insurance. As with the regional data, not all age groups benefited from a fall in prices during the last three months. Drivers aged 32 and between 49 to 51 experienced flat or fractional premium increases of less than 0.5%.

Steve Dukes, CEO at Confused.com comments, “Given the cost of living pressure, the number of customers shopping around and switching their car insurance each year remains at historically high levels. And it’s important that as an industry we’re highlighting the importance of shopping around to help customers save money, even with prices coming down. The insurance market today is a lot broader, with insurers expanding their product ranges and new brands coming to market, creating more choice for customers looking to find a policy that’s suitable for them at a better price.

“But with this also comes a lot of competition between insurers. And what we’re seeing is insurers investing in data and technology in order to focus on acquiring their target customers. This level of specialist data analysis is crucial for insurers to remain competitive and relevant in a very dynamic market.”