“What we are now seeing is the plateauing of increases over the past three years, and potentially the home-coming of a period of steadily decreasing premiums.”
These were the words of data insight head Steve Fletcher when Confused.com released its latest Car Insurance Price Index in association with Willis Towers Watson. According to the index, which is based on price data compiled quarterly from nearly six million customer quotes, UK motorists are now paying £752 on average, or £95 less compared to a year ago.
The decrease in comprehensive car insurance premiums in the second quarter of this year represents not only an 11% slide from the same period in 2017 and 2% from the previous quarter, but also a sustained decline for four consecutive quarters now.
All regions, except for the Scottish Highlands and Islands (1% increase), saw a drop in the cost of motor insurance. The steepest fall was seen in Northern Ireland, at 4.3% to £894; in terms of cities, Scotland’s Kirkwall enjoyed a 9.3% reduction to £582.
As for affordability, Dorchester and Llandrindod Wells topped the charts, with motorists there paying only £522 on average in the second quarter. This figure stands in stark contrast to comprehensive car insurance prices in East London (£1,345).
While this is positive news for policyholders, Willis Towers Watson has a warning for insurance companies.
“Insurers have enjoyed one of the best underwriting results since the mid-1990s, however conditions are likely to get tougher this year,” said UK lead of P&C personal lines pricing Graham Wright. “Increasing competition for market share, combined with falling premiums, will begin to bite.
“These challenges come on top of the ongoing pressures on repair costs and the continuing prioritisation of Brexit, which risks pushing back further the introduction of a new discount rate, currently timetabled for April 2019.”