’The anticipated decline in motor insurance pricing seems to have been reached,’ says director
The UK motor insurance sector saw a slowdown in premium inflation during the fourth quarter of 2023 despite some brands escalating their prices “at a much higher level than average”, new figures by Pearson Ham have revealed.
Published today (10 January 2024), data highlighted the quarter saw an overall growth in premiums of 3.1%, lower than the 16% rise in Q3 and 14% increase in Q2.
And figures also showed that December saw a month-on-month reduction of 0.6%, marking the first such decline since April 2022.
“Following an unparalleled and prolonged phase of escalating premiums, the anticipated decline in motor insurance pricing seems to have been reached”, Stephen Kennedy, director at Pearson Ham, said.
Premiums have been rising since January 2022 due to a number of factors, including adjustments in general insurance pricing practices, regulatory change, escalating claims inflation and broader economic inflation.
While increases slowed in Q4 2023, the data also revealed that throughout year, prices increased by an average 47%.
And at an individual product level, several brands ”escalated their prices at a much higher level than the average over the year” – Pearson Ham highlighted that some were almost double the average.
“It is still unclear whether that observed in December is a seasonal fluctuation or something more profound,” Kennedy said.
Buildings and contents
Meanwhile, Pearson Ham also revealed that premium pricing for combined buildings and contents policies grew by 7.8% during Q4.
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Such growth meant that over the past 12 months, the most competitive premiums increased by 40%.
“The immediate future remains challenging for insurers,” Kennedy said.
“Recent weather-related events coupled with the persisting volatility in claims costs add layers of complexity. It may be premature to expect consistent stability in insurance pricing and we anticipate clearer trends to emerge only as we progress through 2024.”
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
He took up the position of deputy news editor at Insurance Times in March 2023, before being promoted to his current role in May 2024.View full Profile
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