LONDON, April 20, 2021 — Comprehensive car insurance premiums have fallen by 14% (£87) since the first quarter of 2020, with UK motorists now paying £538 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 and the fourth largest decrease in 15 years since the Index was launched in 2006.
Premiums are now the cheapest they have been since 2015, after falling by 7% (£37) in the first quarter of 2021, according to results from the Index, which is the most comprehensive car insurance price index in the UK and based on price data compiled from almost six million customer quotes per quarter.
This quarter also sees the introduction of our updated calculation methodology, adopting the latest machine learning techniques to ensure 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.
| 2020 Q1 | 2021 Q1 | |
|---|---|---|
| Average Premium* | £625 | £538 |
| % Change in Quarter* | -1% | -7% |
| £ Change in Quarter* | -£5 | -£37 |
| % Change Annually* | +6% | -14% |
| £ Change Annually* | +£36 | -£87 |
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: “The scale of the reduction in premiums seen over the last quarter reflects the realities of notably better claims experience under successive COVID-19 lockdowns. The measures have continued to have an impact on the number of drivers on the road - particularly learners - and the miles driven, leading to fewer claims.”
From January to March 2021, the cost of comprehensive car insurance fell across all regions in the UK by at least 4%. Drivers in the North West of England and the Leeds/Sheffield region benefited from the greatest quarterly drop in prices, with their insurance premiums decreasing on average by 8% (£47) to £521 and 8% (£54) to £619 respectively.
More locally focused data shows that drivers in Huddersfield and Blackburn both benefited from the greatest quarterly fall of 10%1, reducing the premiums of drivers in these areas to £581 and £674 respectively. Drivers in Llandrindod Wells experienced the smallest drop in prices of 1% (£3), where drivers were paying an average of £333 in the last three months. The cheapest town is now Kirkwall in the Scottish Highlands, where drivers were paying an average of £317 in the first quarter of 2021 for comprehensive car insurance. West Central London is now the most expensive place in the UK to buy car insurance, with drivers now paying £1,049.
Male and female drivers aged 71 or over benefited from the greatest price fall, compared to other age groups, seeing a 9% quarterly price decrease, taking their annual premiums to £410 and £346 respectively. Meanwhile, male drivers aged between 21 and 30 experienced the smallest drop in prices of 5%, with annual premiums decreasing from £1165 to £1108 for those aged 21 to 25, and from £897 to £853 for those aged 26 to 30.
“The bigger challenge for insurers is the pricing action needed in the run up to implementing the FCA GI Pricing Practices remedies at the end of the year”
Graham Wright | UK Lead of P&C Personal Lines Pricing at Willis Towers Watson
Graham Wright said: “The easing of COVID-19 restrictions and ongoing pandemic conditions naturally create further uncertainty in pricing for future claims experience. However, the bigger forward-looking challenge for insurers and intermediaries alike is the pricing action needed in the run up to the implementation of the FCA’s GI Pricing Practices remedies at the end of the year. This will cause the uncertainty in market pricing levels to continue for months to come.”
Louise O’Shea, CEO at Confused.com comments: “It’s been just over 12 months since we first went into lockdown and the effects of changed consumer buying habits have been reflected in the sharp drop in insurance premium costs. The impact of fewer drivers on the roads has led to fewer claims, which has allowed shoppers to see some of the biggest savings on their car insurance in almost six years. The sensitivity of the current economic climate means that these savings couldn’t come at a better time.
“While the country is starting to re-open, it’s still likely that the changes to our driving behaviour will continue for some time. And as insurers react to industry changes, it’s natural that insurance offerings and pricing are reflective of customers behaviour and 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.
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 While the Shetland Isles recorded a larger price decrease in Q1 2020, a small sample size mean the results are not considered statistically significant.
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.
