Complete automotive insurance coverage premiums have seen a pointy fall of 14% (£87) for the reason that begin of the Covid-19 pandemic in quarter one among 2020, with UK motorists now paying £538 a yr on common.
That is based on the most recent Confused.com Automotive Insurance coverage Value Index, in affiliation with Willis Towers Watson (WTW), which relies on value information from nearly 6 million buyer quotes per quarter.
These newest figures symbolize the most important annual drop since 2014 and the fourth largest lower within the 15 years for the reason that Index was launched in 2006.
Subsequently, complete automotive premiums at the moment are the most cost effective they’ve been since 2015, after falling by 7% (£37) within the first quarter of 2021.
Graham Wright, UK lead of P&C private traces pricing at WTW, stated: “The dimensions of the discount in premiums seen over the past quarter displays the realities of [a] notably higher claims expertise beneath successive Covid-19 lockdowns.
“The measures have continued to have an effect on the variety of drivers on the street – significantly learners – and the miles pushed, resulting in fewer claims.”
This quarter additionally sees the introduction of WTW’s up to date calculation methodology, which makes use of machine studying strategies to allow the Index to offer an correct view of the present market.
Comparisons with outcomes from this quarter have been calculated primarily based solely on values generated by the brand new Index.
Additional uncertainty
From January to March 2021, the price of complete automotive insurance coverage dropped throughout all areas within the UK by at the very least 4%.
Drivers within the north west of England, in addition to the Leeds and Sheffield area, noticed a quarterly drop of their common annual premium costs of 8% – this amounted to a £47 drop to £521 and a £54 lower to £619 respectively.
As well as, drivers in Huddersfield and Blackburn noticed a quarterly fall of 10%, lowering the premiums of drivers in these areas to £581 and £674 respectively.
However drivers in Llandrindod Wells skilled the smallest drop in premium costs of simply 1% (£3) – premiums had been a mean of £333 within the final three months.
Wright added: “The easing of Covid-19 restrictions and ongoing pandemic circumstances naturally create additional uncertainty in pricing for future claims expertise.
“Nonetheless, the larger forward-looking problem for insurers and intermediaries alike is the pricing motion wanted within the run as much as the implementation of the FCA’s normal insurance coverage pricing practices treatments on the finish of the yr. It will trigger the uncertainty in market pricing ranges to proceed for months to come back.”
The most affordable city for complete automotive insurance coverage is now Kirkwall within the Scottish Highlands, the place drivers paid £317 on common for an annual coverage within the first quarter of 2021.
| Complete Automotive Insurance coverage – Quarterly Value Developments | ||
|---|---|---|
|
2020 Q1
|
2021 Q1
| |
|
Common Premium
|
£625
|
£538
|
|
% Change in Quarter
|
-1%
|
-7%
|
|
£ Change in Quarter
|
-£5
|
-£37
|
|
% Change Yearly
|
+6%
|
-14%
|
|
£ Change Yearly
|
+£36
|
-£87
|
Altering shopper habits
In the meantime, west central London is now the costliest place within the UK to purchase automotive insurance coverage, with policyholders paying £1,049 a yr.
Female and male drivers aged 71 or above noticed a 9% quarterly value lower, with premiums recorded at £410 and £346 respectively.
Male drivers aged between 21 and 30 skilled the smallest drop in costs of 5%, whereas annual premiums decreased from £1,165 to £1,108 for these aged 21 to 25.
This lower continued for male drivers aged 26 to 30, from £897 to £853.
Louise O’Shea, chief government of Confused.com, stated: “It’s been simply over 12 months since we first went into lockdown and the results of modified shopper shopping for habits have been mirrored within the sharp drop in insurance coverage premium prices.
“The affect of fewer drivers on the roads has led to fewer claims, which has allowed buyers to see a few of the greatest financial savings on their automotive insurance coverage in nearly six years. The sensitivity of the present financial local weather signifies that these financial savings couldn’t come at a greater time.
“Whereas the nation is beginning to reopen, it’s nonetheless seemingly that the modifications to our driving behaviour will proceed for a while. And as insurers react to trade modifications, it’s pure that insurance coverage choices and pricing are reflective of shoppers’ behaviour and altering wants.”
