Motor rate rises slow for third quarter: Towers Watson/Confused

Motor insurance price rises are slowing, according to research from Confused and Towers Watson.

The research shows that comprehensive and third party fire and theft (TPFT) car insurance have slowed for the third quarter running.

The Confused and Towers Watson car insurance price index shows that the average price of a comprehensive car insurance policy rose by 3.8% in the first three months of 2011, compared to 7.1% in the final quarter of 2010.

The annual rate of price inflation for comprehensive cover is now 35.7%, compared to 37.8% at the end of 2010.

Third party, fire and theft (TPFT) policies rose by 6.3% in Q4 of 2010, reducing the annual rate of increase to 53.6%

Towers Watson actuary Peter Lee said: “The private car insurance market has had to keep raising prices to counter poor claims experience. But the market has been virtually stood on its head so far in 2011.

"The real and potential impact of increases in insurance premium tax and VAT, the European Court of Justice ruling preventing the future use of gender in pricing, and government plans for addressing civil litigation costs make it hardly surprising that many are taking stock of their position."

Confused head of motor Gareth Kloet said: “It’s good news for consumers that price rises are slowing but there is still a lot of uncertainty about what the future holds. Our figures show there are still good deals to be had as, for example, younger drivers and particularly younger men using Confused.com experienced much lower than average premium increases during the quarter.”