Skip To The Main Content

Car insurance price rise slows down

by  | 

The average price of a comprehensive car insurance policy slowed down to a rise of only 2.7% in the second quarter of 2011, a lower increase than that of the previous quarters 3.8% increase. The average price of a comprehensive car policy is now £858.

The slowing rate of increase means that the year on year annual rate reduced from 38% to 25%.

Third party fire and theft cover saw only an increase of 1% in the quarter and 33% over the 12 months to the end of June, reaching £1,132 for an average premium.

The continued deceleration in price increases came despite recent analysis that say the insurance industry paid out £1.24 for every pound of premium received in 2010.

Towers Watson Car Insurance Price Index, the company responsible for the analysis and results, added that research from the Institute and Faculty of Actuaries had shown that 25% of third party motor claims in the UK now involve an expensive bodily injury claim.

Whether the market as a whole has moved rates up enough to move into profitability given recent claims inflation is, however, far from clear."

Towers Watson has reported that Manchester and Merseyside was an area with one of the highest concentrations of claims management companies. It added that the region had experienced the largest price increases over the last 12 months of nearly 35%, with an average increase of just fewer than 5% between April and June.

In a glaring contrast, the four Scottish regions, where claims management companies do not exist, had the lowest rate of annual increase across the UK and actually recorded price decreases of up to 2.3% in the last quarter.

Bradford remained the postcode with the fastest rising comprehensive insurance prices over a 12 month period at just under 40%.

By Ben Malkin  

© Copyright Autonet Insurance