LONDON, 21 October, 2020 — Comprehensive car insurance premiums have fallen by 1% (£5) in the third quarter of 2020, according to the latest Confused.com Car Insurance Price Index in association with Willis Towers Watson. However, this does precede future impacts that may follow the recently released FCA report on pricing practices.
The average cost of car insurance has now fallen for three consecutive quarters and is now £765, following a £18 (2%) decrease over the past year, according to the longest established and most comprehensive car insurance price index in the UK, which is based on price data compiled from almost six million customer quotes per quarter.
| 2019 Q3 | 2019 Q4 | 2020 Q1 | 2020 Q2 | 2020 Q3 | |
|---|---|---|---|---|---|
| Average Premium* | £783 | £815 | £809 | £770 | £765 |
| % Change in Quarter* | -1% | +4% | -1% | -5% | -1% |
| £ Change in Quarter* | -£6 | +£32 | -£6 | -£39 | -£5 |
| % Change Annually* | +3% | +5% | +6% | -2% | -2% |
| £ Change Annually* | +£23 | +£41 | +£47 | -£19 | -£18 |
Graham Wright, UK Lead of P&C Personal Lines Pricing at Willis Towers Watson, commented: “The further fall in premiums during the last quarter is perhaps unsurprising as motor insurers reflected on a relatively positive experience for the year to date. But with further Covid restrictions being introduced and a market response to the FCA’s recently released pricing practices report still to be factored in, uncertainty in premium levels continues.”
“With further Covid restrictions being introduced and a market response to the FCA’s recently released pricing practices report still to be factored in, uncertainty in premium levels continues.”
Graham Wright | UK Lead of P&C Personal Lines Pricing at Willis Towers Watson
Drivers in the Scottish Borders benefited from the greatest quarterly drop in prices, with their insurance premiums decreasing on average by 5% (£30) to £5541. Inner London was the only region in the UK to buck the downward trend in prices, with the cost of comprehensive car insurance increasing by 3% (£32).
More locally focused data shows that towns based in Scotland saw the greatest quarterly drop in prices, led by Galashiels where premiums fell by 7% (£42) and drivers now paying an average of £542 in the last three months, followed by Glasgow and Motherwell, with both benefiting from a 5% decrease in premiums.
Drivers in the West Central London experienced by far the sharpest rise in the third quarter of 32% (£363), where drivers on average now pay £1502, making it the most expensive place in the UK to buy car insurance. The cheapest town is now Dorchester, where drivers were paying an average of £530 for comprehensive car insurance during the last three months.
Drivers aged 17 benefited from the greatest price fall, compared to other age groups, seeing a 7% (£140) quarterly price decrease, bringing their annual premiums down to £1911. Meanwhile, drivers aged 33 experienced the largest price rise of 2% (£13), increasing their annual premiums to £705.
Graham Wright said: “One of the biggest challenges for insurers and intermediaries alike will be managing the transition to new world pricing given current market competitive pressures, and therefore deciding how and at what point price changes should be made. It certainly remains one of the most demanding times for insurance pricing.”
Louise O’Shea, CEO at Confused.com, comments: “It’s been a turbulent few months for the world of car insurance and it’s likely to remain that way for some time as insurers try to adapt to dramatic and constant changes in driver behaviour. Not to mention how they navigate the much-needed changes announced by the FCA last month. Our analysts will be helping insurers to navigate this tumultuous period, but volatile pricing movements are likely to be a fixture of the coming year.
“What we do know is that more and more people are shopping around as they, understandably, look to make savings in the current economic climate. The FCA is making proposals which is expected to make switching even easier by streamlining the auto-renewal cancellation process, so we may see people taking advantage of this as they become increasingly sensitive to price.”
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.
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 While the Shetland Isles recorded a larger price decrease in Q3 2020, a small sample size mean the results are not considered statistically significant.
