Motor premiums ‘may be turning a corner’ as prices drop

Car insurance premiums “finally may be turning a corner” as new data showed prices fell 5% over the last three months.

According to Confused.com and WTW’s index, which was published today (18 April 2024), UK motorists were now paying £941 on average, £54 less than at the start of 2024.

Both firms said this indicated prices might be starting to fall for the first time since a worldwide surge in inflation began in mid-2021.

Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said: “After a series of record highs in 2023 took car insurance premiums into uncharted territory, the latest pricing data suggests the relentless rise in prices may finally be turning a corner.”

However, the data also showed that car insurance premiums still recorded an annual rise of 43% (£284) from Q1 2023 to Q1 2024.

“Even with inflation easing, however, more vehicles with advanced technology that require complex and expensive repairs and higher rental vehicle costs, increased frequency and severity of claims and ongoing supply chain issues risk a perfect storm of issues that can be expected to continue to put pressure on car insurance premiums,” Rourke said.

Regions

All regions across the UK recorded price falls over the last three months.

Drivers in Northern Ireland saw the largest percentage decrease in the cost of comprehensive car insurance, with a quarterly decrease of 8%.

The smallest annual decrease was seen in Central Scotland, where drivers saw a quarterly fall of 3%, with average premiums now costing £871.

Meanwhile, drivers aged 28 benefited from the highest price fall compared to other age groups, seeing a 9% quarterly price decrease.

The only age group to see their car insurance prices increase during the first quarter of 2024 were drivers aged 17, with a rise of 1% (£42).

Steve Dukes, chief executive at Confused.com, said: “While the cost of car insurance may have dropped at the beginning of this year, customers are still paying historically high prices for their car insurance.

“Premiums are still more expensive year-on-year, so as an industry, there’s still an important role to play in helping customers to understand where they could be saving money.”