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Cost Efficiency

Quoted motor insurance premiums accelerate with record rise

Average quoted car insurance premiums have also seen a record 22% rise in the three months from May to August - the biggest quarterly increase for the index, since tracking began in October 2013. Telematics providers are becoming less competitive accounting for just 17% of the top five quotes compared with 21% just three months ago.

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THE average quoted price of car insurance rose by 61% in the year to August– the highest annual increase on record, the latest Consumer Intelligence Car Insurance Price Index   shows.

Average quoted car insurance premiums have also seen a record 22% rise in the three months from May to August – the biggest quarterly increase for the index, since tracking began in October 2013.

Telematics providers are becoming less competitive accounting for just 17% of the top five quotes compared with 21% just three months ago.

That has particularly hit younger drivers and telematics providers now account for just 41% of the most competitive quotes for under-25s compared with 53% three months ago. Under-25s are seeing rises in quoted premiums of 66.7%.

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“Motorists of all ages have seen new business quotes soar over the last year and many will likely be feeling the pinch in their household budgets against a backdrop of other rising costs of living,” said Max Thompson, Insurance Insight Manager at Consumer Intelligence.

“Competition from telematics has reduced for a second consecutive quarter. This drop-back in telematics delivering competitive quotes has likely triggered the sharper increases in competitive premiums seen this quarter, as telematics quotes are usually significantly cheaper than traditional quotes.”

Long-term view

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Average overall quoted premiums have more than doubled by 102.9% since October 2013 when Consumer Intelligence first started collecting data.

Quoted premiums are at their highest levels since Consumer Intelligence records began with 66.2% of the increase happening since December 2022.

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Age differences in the past year

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The over-50s have seen the smallest increases in quoted premiums in the past 12 months at 56.3% compared with 61% for those aged 25 to 49 and 66.7% for the under-25s.

Telematics

The proportion of competitive price comparison website quotes provided by telematics providers for young driver has fallen to a six-year low comparable with February 2017.

The fall in competitiveness for telematics is partly explained by changes implemented by leading providers. Hasting Direct YouDrive which was a market leader at the start of the year and particularly in the 20 to 24-year-old market has increased premiums while QuoteMeHappy Connect which only quoted ages 17 to 29 withdrew from the market towards the end of July.

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Regional differences

Average quoted premiums have risen the most for drivers in London, the West Midlands and the South East with increases of 69.5%, 64.4% and 64.2% respectively.

Drivers in the North West are experiencing the lowest rises in quoted premiums but even they face rises of 55%.

 

Region Price Index past 12 months (August 22 to August 23)
London +69.5%
North West +55%
West Midlands +64.4%
 Yorkshire & The Humber +60.2%
 North East +56.1%
 South East +64.2%
 Eastern +60.7%
 Scotland +60.6%
 East Midlands +58.1%
 Wales +56%
 South West +59.5%

 

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