Comprehensive premiums rose 12.3% this year compared to 37.8% in the previous 12 months
Rate rises for comprehensive motor insurance premiums have slowed to 12.3% for the year ending September 2011, according to the Confused.com and Towers Watson Car Insurance Price Index.
In comparison, premiums rose 37.8% over the course of 2010.
The average cost of a comprehensive policy now stands at £843, an increase of £92 since October of 2010 but a drop of £15 in the quarter.
The slowing of price rises was due in large part to a third quarter decrease of 1.6%, the first price decrease since the second quarter of 2008.
Average prices for third party, fire and theft customers continued to rise at a rate of 2% during the quarter, leaving the average cost of a policy at £1,155.
Towers Watson director Peter Lee said: “As we stated in our recent annual Motor Insurance Industry Report, the pressure of reacting and adapting to escalating levels of bodily injury claims largely dictated why prices rose steeply. Whether the current state of insurer profitability justifies dropping prices just yet is something of an open question.
“Although the economic downturn has reduced claims as a result of people driving less, the proportion of accidents that result in bodily injury claims is still growing strongly. What is clear is that competition in the market is healthy.”
Confused.com head of motor Gareth Kloet said: “The good news for consumers is that prices appear to be levelling out and there is real momentum behind making sure that the legal system creates an environment where conscientious drivers, who make up the vast majority, can get a fair deal from insurers.”
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