LONDON, 14 October, 2021 — Comprehensive car insurance premiums have fallen by 16% (£97) since the third quarter of 2020, with UK motorists now paying £514 on average. According to the latest Confused.com Car Insurance Price Index in association with Willis Towers Watson, this is the biggest annual drop since 2014. Prices have now fallen for six out of the last seven quarters, although the rate of decline has slowed between July and September compared to the first half of this year.
Premiums are now the cheapest they have been since mid 2015, after falling by another 2% (£8) in the third quarter of 2021, according to results from the Index, which is the most comprehensive car insurance price index1 in the UK and based on price data compiled from almost six million customer quotes per quarter.
| 2020 Q3 | 2021 Q3 | |
|---|---|---|
| Average Premium* | £611 | £514 |
| % Change in Quarter* | +3% | -2% |
| £ Change in Quarter* | +£19 | -£8 |
| % Change Annually* | +1% | -16% |
| £ Change Annually* | +£6 | -£97 |
Source: Willis Towers Watson / Confused.com Car Insurance Price Index. *Values rounded to the nearest whole number.
“Together with the widespread supply chain issues affecting many industries including automotive repairs, the outlook on pricing for 2022 is extremely uncertain.”
Stephen Jones
UK P&C Consulting Lead
Willis Towers Watson
Stephen Jones, UK P&C Consulting Lead at Willis Towers Watson, said: “The downward trend in prices has continued for four consecutive quarters, driven primarily by the lower exposures and claims experience resulting from the Covid pandemic. However, the rate at which prices are falling has slowed in the last three months, explained in part by the increased number of commuters returning to driving since the easing of lockdown rules, UK summer staycations, and other changed driving patterns. But of course any trends here need to be balanced against the expectations around any rate changes which will be required to fulfil the FCA’s price walking ban.”
From July to September 2021, the cost of comprehensive car insurance has continued a downward trend across every region in the UK, except for the South West of England which saw a 1% rise in premiums. Drivers in the Manchester/Merseyside region benefited from the greatest quarterly drop in prices, with their insurance premiums decreasing on average by 4% to £646, followed by the North East and North West regions in England, which both saw quarterly falls of 3% and prices falling to £458 and £496 respectively.
More locally focused data shows that drivers in Dumfries and Wigan benefited from the greatest quarterly fall of 6%, reducing the premiums of drivers in these areas to £319 and £516 respectively. The next biggest fall was seen in Aberdeen, which experienced a 5% drop in prices, where drivers were paying an average of £352 in the last three months.
West Central London remains the most expensive place in the UK to buy car insurance, with drivers now paying on average £977. At the other end of the scale, the cheapest town is also unchanged, with drivers in Llandrindod Wells in Wales now paying an average of £307 in the third quarter of 2021 for comprehensive car insurance.
Male drivers aged 51 to 55 benefited from the greatest price drop, compared to other age groups, seeing a quarterly price decrease of just over 2%, taking their annual premiums to £429. Meanwhile, male drivers aged between 17 and 20 and female drivers 71 and over experienced the most marginal of falls, with less than a 1% shift in prices and annual premiums decreasing from £1434 to £1424 for male drivers aged 17 to 20 and from £331 to £330 for female drivers aged 71 and over.
Stephen Jones said: “The FCA’s price walking ban from 1 January 2022 has received significant senior management attention during 2021 and consumed significant amounts of insurers’ pricing resources. The pricing impacts of these efforts will emerge in the months ahead. Together with the widespread supply chain issues affecting many industries including automotive repairs, the outlook on pricing for 2022 is extremely uncertain.”
Louise O’Shea, CEO at Confused.com comments: “It’s likely that prices could start to creep up as people return to work and people are spending more time travelling on the road, which all means the risk of accidents is a lot higher. We’re already starting to see this in some areas of the UK. And this will mean that the overall price of insurance will increase, which means the cost of renewal will too.
“From January there will be some important changes to the way insurers are pricing customers, and the concern is that customers will accept a flat or slightly lower price and simply choose to renew. But the current savings on offer show that insurers are willing to give consumers a better deal, and even if the market changes, this pattern will likely remain.”
The index is compiled using anonymous data from all enquiries submitted on Confused.com. The prices used for analysis are based on an average of the best five quotes received.
The Confused.com car insurance price index has been running for more than 10 years. In this time, the price comparison market has grown significantly (80% market share), and the make-up of the UK driving population has changed along with it. We’ve been monitoring trends within the car insurance industry, and have updated our method utilising machine learning techniques to one that reflects today’s UK motor market. This has resulted in an adjustment to the car insurance prices reported in our index.
Launched in 2002, Confused.com was the UK's first price comparison site for car insurance and is one of the UK’s biggest and most popular price comparison services, generating over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include small van insurance, motorcycle insurance, car buying, and car finance, as well as a number of tools designed to save drivers money on motoring.
Confused.com is not a supplier, insurance company or broker. It provides an objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com’s service is based on the most up-to-date information provided by UK suppliers and industry regulators.
Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is authorised and regulated by the Financial Conduct Authority.
Willis Towers Watson’s Insurance Consulting and Technology business has over 1,200 colleagues operating in 35 markets worldwide. It is a leading provider of advice, solutions and software – primarily to the insurance industry. Its consulting services help clients manage risk and capital, improve business performance and create competitive advantage – by focusing on financial and regulatory reporting, enterprise risk and capital management, M&A and corporate restructuring, products, pricing, business management and strategy.
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving in more than 140 countries and markets. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.
1 Q1 2021 saw the introduction of Willis Towers Watson’s updated calculation methodology, ensuring the Index continues to provide the most accurate view of today’s market. For this reason, comparisons with results from this quarter have been calculated based solely on values generated by the new Index.
Prices fall by 1% to £765 in the last three months, with drivers now paying £50 less than they were at the start of 2020.
