Motor insurers are facing cost pressures, but they remain committed to keeping cover as ’competitively priced as possible’, says general insurance manager
The average price paid for motor insurance in the UK rose by £5 in Q2 2022, according to the ABI’s latest Motor insurance premium tracker results, published today (8 August 2022).
In quarter two this year, the ABI found that consumers paid an average of £419 for comprehensive, annual motor insurance - up from £414 in Q1. This represents a 1.3% price increase quarter-on-quarter.
The ABI’s research tracks what price consumers pay for their motor insurance, rather than the price they are quoted for it. This is compiled from data supplied by the main motor insurers among the ABI’s membership.
Insurers are finding it increasingly challenging to absorb rising cost pressures – such as secondhand car prices and more expensive vehicle repairs – said the ABI. This has led to a slight increase in premiums across the quarter.
The ABI added that average used car price increases have been affected by longer new car delivery times, which have - in turn - been impacted by global supply chain disruptions caused by the fallout of the Covid-19 pandemic and the Russian invasion of Ukraine.
AutoTrader’s Retail price index: July 2022, published on 4 August 2022, found that the average price of a used car was £17,173 in July, which is a 19.5% increase on the same period last year.
Meanwhile, the ABI added that, while still too early to assess the impact of the FCA’s price walking rules - which were fully introduced in January 2022 - indications showed that the difference between new and renewed average premiums had grown.
Average premiums for new policies increased by 3% to £500 in 2022’s Q2, while average premiums for renewed policies grew by just 0.5% to £371.
Competitively priced
Callum Tanner, the ABI’s general insurance manager, said: “Insurers appreciate that these are difficult times for many households dealing with the rising cost of living.
“Like many other sectors, motor insurers are facing higher cost pressures of their own – which are becoming increasingly challenging to absorb – they will continue to do all they can to keep motor insurance as competitively priced as possible.”
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