The common price of probably the most aggressive motor insurance coverage offers has soared a document 21.1% previously yr taking annual payments to £929, the newest motor insurance coverage worth index revealed by Shopper Intelligence reveals1.
A “excellent storm” of the scarcity of recent and used vehicles plus the impression of inflation on automobile components, repairs and servicing and motion by regulators to ban twin pricing has ramped up costs, Shopper Intelligence says.
The scarcity of vehicles has pushed up the price of changing autos concerned in claims whereas rising prices for components, repairs and servicing has added to the pricing pressures.
The Monetary Conduct Authority’s Normal Insurance coverage Pricing Practices (GIPP) guidelines launched in January 2022 which banned insurers from providing totally different premiums to new and present clients have additionally had an impression.
“That is the biggest yearly enhance we’ve seen since we began monitoring quoted premiums in October 2013 and over the past three months alone premiums have soared 6.7%. That’s the second largest quarterly enhance we’ve ever witnessed as effectively,” says Ian Hughes, CEO of Shopper Intelligence.
“It is a excellent storm for insurers. A yr on from the GIPP guidelines being launched which was supposed to trigger a dramatic shift in client behaviour has compounded with customers lowering the extent of canopy they’re buying from their insurer to economize throughout these determined occasions,” he provides.
Drivers in London pay the best quoted premiums at £1,419 whereas these within the South West the place quoted the bottom at £576. Costs are rising quickest within the East Midlands and London at 26.4% and 26.3% respectively whereas the North East noticed the bottom worth rises at 12.1%
The rise in quotes throughout the board is boosting demand for telematics merchandise which reward safer drivers with decrease premiums. They now make up a document 33% – the best degree since Shopper Intelligence first began monitoring – of the most affordable insurance coverage quotes for a typical motorist and 72% of probably the most aggressive offers for under-25s.
Lengthy-term view
Common total quotes have elevated 41% since October 2013 when Shopper Intelligence first began gathering information.
Nevertheless, prices are down 20.1% over the interval for the under-25s whereas they’ve elevated 80.4% for the over-50s and 54% for these aged between 25 and 49.
Age variations previously yr
The under-25s – who’re statistically extra more likely to have an accident – have seen smaller wuoted costs will increase previously yr at 17.9% however they proceed to be quoted probably the most for insurance coverage at £1,917.
Quoted worth rises for the over-50s and motorists aged between 25 and 49 have been nearly the identical with premiums for the over-50s up 22.5% and 22.1% for the over-25s. Nevertheless, the over-50s pay common annual premiums of £462 in contrast with £700 for the over-25s.
Telematics
The variety of telematics merchandise that make up the 5 least expensive insurance coverage quotes for a typical motorist has continued to develop, hitting a document 33% – the best degree since Shopper Intelligence started monitoring in 2013.
The expansion in telematics competitiveness has been pushed by telematics suppliers who’re more and more squeezing conventional insurers out of the competitors for the enterprise of under-25s who depend on telematics to get moderately priced automobile insurance coverage in the event that they drive sensibly.
Telematics insurance policies base premiums on the way you drive, with insurance coverage turning into cheaper for safer drivers. At the moment 72% of the 5 least expensive insurance coverage quotes for under-25s are from telematics suppliers in contrast with 25% for the 25 to 49 age group and simply 12% for the over-50s.
Regional variations
Drivers within the East Midlands and London are experiencing the quickest rises in motor premiums at 26.4% and 26.3% respectively however no areas escaped worth rises. The North East noticed the bottom enhance however annual payments are nonetheless 12.1% greater.
Londoners proceed to pay probably the most for motor insurance coverage at £1,419 adopted by the North West at £1,248. The most cost effective area for motor insurance coverage is the South West at £576.
| Area | Worth Index Final 12 months (Feb 22 to Feb 23) |
Feb 2023 Common Quoted Premium (5 least expensive) |
| East Midlands | +26.4% | £676 |
| London | +26.3% | £1,419 |
| Wales | +24.7% | £616 |
| Scotland | +21.1% | £762 |
| South East | +20.6% | £774 |
| South West | +20.5% | £576 |
| West Midlands | +20.1% | £1,194 |
| North West | +19.1% | £1,248 |
| Japanese | +19.1% | £787 |
| Yorkshire & The Humber | +17.8% | £692 |
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