ABI tracker reports rise in motor insurance in Q2

The average cost of comprehensive private motor insurance in the second quarter of 2015 was £367, up 2.1% from the previous quarter and 2.9% higher than in Q2 2014, according to figures released today by the ABI.

The ABI’s Quarterly Average Private Comprehensive Motor Insurance Premium Tracker shows an average premium of £367 for the three months from April to June, up from £359 in the first quarter of 2015.

Despite the increase, average premiums still remain lower than they were in the second quarter of 2013 (£377) when the government introduced reforms to the civil justice system, including a cut in fixed legal fees for personal injury claims.

The ABI said insurers have passed £1.1bn in savings on to motorists since the reforms were introduced.

However, data from the claims portal shows the number of personal injury claims related to road accidents was 12% higher for the year ending April 2015 compared with the previous 12 months.

ABI general insurance manager Rob Cummings said: “Motorists have seen a solid two years of lower insurance premiums as a result of market trends and in the wake of the government’s reforms to tackle frivolous personal injury claims, and over £1bn pounds’ worth of savings have been passed on to customers.

“With pressure on premiums increasing however, it’s important the government continues its work to tackle the compensation culture and attack the high cost and number of whiplash claims. With this in mind, we welcome the government’s announcement of a review of the activities of claims management companies in the last Budget.

“UK drivers benefit from one of the most competitive motor insurance markets in the world. But with pressure on claims costs and an increase in insurance premium tax adding an additional £12.80 to the cost of the average policy from November, other factors are starting to put up costs. This makes action against claims management companies and tackling whiplash claims a key priority.”