Motor premiums 'at a two-year low' - ABI

The cost of motor insurance has fallen to its lowest figure in two years, according to the ABI Motor Insurance Premium Tracker.

According to the tracker, the average price paid for motor insurance in the first quarter of the year was £466, the lowest quarterly figure since Q1, 2017.

And compared to Q4 2018, the average premium fell £15, the largest quarter on quarter fall since 2013.

Reasons for the fall

The ABI says the premium fall is likely to be insurers passing on expected cost savings in anticipation of the Civil Liability Act reforms..

Mark Shepherd, ABI’s assistant director, head of general insurance policy, said: “The falling cost of motor insurance is great news for motorists after several years of rising premiums, which largely reflected the UK’s costly personal injury compensation system. As the industry promised, motorists are now beginning to see the benefits of the personal injury reforms recently enacted.

“However, some cost pressures remain, with rising repair costs, and the Government needing to resist any temptation to further increase Insurance Premium Tax. So motorists should continue to make the most from a competitive market by shopping around for the best deal for their needs.”

A spokesman for the ABI said: “Back in March 2018, a number of insurer CEOs publicly pledged to pass on the cost benefits of any the reforms.

“Now that the Civil Liability Act is in place, insurers can get a much better picture of how the reforms, once they come in, are likely to impact on their business.

“Any such assumptions will of course be for individual insurers to make, along with a wide range of factors that impact on the prices they charge for cover.”