LONDON, January 15, 2021 — Comprehensive car insurance premiums have fallen by 6% (£52) during the last 12 months, with UK motorists now paying £763 on average, according to the latest Confused.com Car Insurance Price Index in association with Willis Towers Watson.
The average cost of car insurance has now fallen for four consecutive quarters, although the rate of decline slowed in the final quarter of 2020 at just 0.2%, according to the longest established and most comprehensive car insurance price index in the UK, based on price data compiled from almost six million customer quotes per quarter.
| 2019 Q4 | 2020 Q1 | 2020 Q2 | 2020 Q3 | 2020 Q4 | |
|---|---|---|---|---|---|
| Average Premium* | £815 | £809 | £770 | £765 | £763 |
| % Change in Quarter* | +4% | -1% | -5% | -1% | 0% (-0.2%) |
| £ Change in Quarter* | +£32 | -£6 | -£39 | -£5 | -£2 |
| % Change Annually* | +5% | +6% | -2% | -2% | -6% |
| £ Change Annually* | +£41 | +£47 | -£19 | -£18 | -£52 |
Source: Willis Towers Watson / Confused.com Car Insurance Price Index. *Values rounded to the nearest whole number.
Graham Wright, UK Lead of P&C Personal Lines Pricing at Willis Towers Watson, commented: “Looking across 2020 as a whole, prices fell reflecting the impact of COVID-19 lockdown measures on the nation’s driving and consequential claims experience. However, most of that reduction was evident in the middle part of the year with more stable trends of late reflecting the competing upwards pressure on new business pricing arising from the forthcoming implementation of changes in response to the FCA’s market study.”
The cost of comprehensive car insurance over the last 12 months decreased across all regions in the UK, with drivers in South Wales, and Central, East and North East of Scotland benefiting from prices falling by more than 10%, with average premiums now costing £659, £643 and £560 respectively. The smallest annual decrease of 3% (£40) was seen in Inner London, reducing average annual premiums to £1220, followed by the East Midlands, where prices fell by 4% (£29) to £754. Manchester / Merseyside (£984) and the West Midlands (£958) are the most expensive areas outside of the capital, while the South West remains the cheapest region for car insurance, where prices on average cost £549.
More locally focused data shows motorists in Harrogate1 experienced the greatest annual decrease in prices at 14% (£94), reducing their premiums to £559, while London East is the most expensive postcode area for motor insurance in the UK, where drivers now pay an average of £1425. The cheapest town is now Llandrindod Wells, with drivers facing an average bill of £501 at the end of 2020 for comprehensive car insurance.
The demographic that saw the greatest annual decrease were male and female drivers aged 71 or over, who saw a 9% price decrease taking their premiums to £498 and £417 respectively. Male drivers aged between 17 and 20 are still paying the most of any demographic - with premiums decreasing by just 2% - and now pay on average £2311 compared to £2369 one year ago.
“The outlook for 2021 remains uncertain. Not only are there competing pressures on price from COVID-related impacts on claims experience and actions in advance of the FCA fair pricing rules taking effect, but there are also many other challenges observed throughout 2020 that will persist for insurers into this year”
Graham Wright,
UK Lead of P&C Personal Lines Pricing at Willis Towers Watson.
Graham Wright said: “The outlook for 2021 remains uncertain. Not only are there competing pressures on price from COVID-related impacts on claims experience and actions in advance of the FCA fair pricing rules taking effect, but there are also many other challenges observed throughout 2020 that will persist for insurers into this year. The ongoing situation makes future prediction of claims inflation, the Civil Liabilities Bill implementation (recently delayed to May) and the impact on future reinsurance costs all the more challenging.”
Louise O’Shea, CEO at Confused.com comments: “People are increasingly sensitive to price in the current economic climate, meaning we’re seeing more and more people shopping around as they look to make savings. Those shoppers are seeing some of the biggest savings on their car insurance for a long while and it couldn’t come at a better time. It’s been nearly 12 months since we first went into lockdown and this has put so many people in a difficult situation, so I have no doubt this news will be welcomed by many. People are at home and driving less and car insurance prices are reflecting that.
“As customers adapt their behaviour and insurers anticipate further industry changes, our analysts will be helping insurers to navigate this volatile period. We want to help insurers rise to the challenge and seize the opportunity to develop relevant offerings which are more suitable to customers’ changing needs.”
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 Hebrides and Shetland Isles both recorded a larger price decrease in 2020, their small sample size mean the results are not considered statistically significant.
