LONDON, 20 October, 2022 — Comprehensive car insurance premiums have increased sharply by 14% (£72) since the third quarter of 2021, with UK motorists now paying £586 on average, according to the latest Confused.com Car Insurance Price Index in association with WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.
“Insurers have found it increasingly challenging through 2022 to absorb a bitter cocktail of rising cost pressures”
Tim Rourke | UK Head of P&C Pricing, Product, Claims and Underwriting at WTW
Car insurance premiums have seen consecutive annual increases for the last three quarters, following the implementation of the new FCA pricing rules on 1 January 2022. Motor insurance premiums have now also risen for four quarters in a row, with a significant rise of 6% (£32) recorded in just the last three months, according to the longest established and most comprehensive car insurance price index in the UK. The index is based on price data compiled from over six million customer quotes per quarter.
| 2021 Q3 | 2022 Q3 | |
|---|---|---|
| Average Premium* | £514 | £586 |
| % Change in Quarter* | -2% | +6% |
| £ Change in Quarter* | -£8 | +£32 |
| % Change Annually* | -16% | +14% |
| £ Change Annually* | -£97 | +£72 |
Source: WTW / Confused.com Car Insurance Price Index. *Values rounded to the nearest whole number.
Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW, said: “Car insurance prices have risen across the board as insurers have found it increasingly challenging through 2022 to absorb a bitter cocktail of rising cost pressures. Soaring inflation, rising accident frequency due to a post-pandemic increase in road traffic, higher used car prices, and a supply chain crisis resulting in more costly repairs have caused the biggest annual jump in premiums for five years.”
From July to September 2022, all regions recorded double-digit price rises in insurance premiums. Northern Ireland saw the largest percentage increase in the cost of comprehensive car insurance, where drivers saw an annual rise of 20% (£106), with average premiums now costing £631. Meanwhile, drivers in the Scottish Borders experienced the biggest percentage rise in Scotland with an annual hike in premiums of 19% (£64). Despite this rise, the region retains its position as the cheapest region for car insurance, where prices now average £391.
Inner London saw the greatest annual rise in England, where insurance premiums increased by 16% (£132), and remains the most expensive region with prices now on average at £936. Manchester and Merseyside (£737) continues to be the most expensive area outside of the capital, and only £4 less than average premium prices in Outer London (£741).
| 2021 Q3 | 2022 Q3 | |
|---|---|---|
| Inner London | £804 | £936 |
| Outer London | £648 | £741 |
| Manchester / Merseyside | £646 | £737 |
| West Midlands | £620 | £697 |
| Leeds / Sheffield | £592 | £669 |
Source: WTW / Confused.com Car Insurance Price Index. *Values rounded to nearest whole number.
More locally focused data shows motorists in West Central London, Aberdeen and Dumfries experienced the sharpest annual rise of 23% taking their average premiums to £1,204, £434 and £392 respectively. West Central London also continues to be the most expensive postcode in the country, while Llandrindod Wells in Wales remains the cheapest town in the UK, with drivers paying an average bill of £364 in the third quarter of 2022 for comprehensive car insurance.
Male drivers aged between 21 and 25 saw the greatest percentage increase of 18% (£190) during the last 12 months, taking their premiums to £1249. Following a 17% annual shift in prices (£248), male drivers aged between 17 and 20 now pay on average £1673, which is the most of any demographic and £424 higher than the next highest age group. Female drivers aged between 66 and 70 continue to benefit from the lowest annual premium at £287.
Tim Rourke said: “Rising premiums add to the cost-of-living squeeze facing customers, forcing them to seek savings on insurance. While choosing a higher excess and less add-on products can help reduce premiums, this may also increase the risk of drivers being left without an adequate safety net when they need it most. This places further pressure on insurers to keep motor premiums as competitively priced as possible, while continuing to deploy robust defences to policy and claims fraud, which typically rise during difficult financial times.”
Louise O’Shea, CEO at Confused.com comments: "This quarter has not only proved the most expensive of 2022, but figures show that this is the biggest annual increase in five years with premiums rising by 14%. With the cost-of-living crisis at the forefront of everyone's minds right now, it's no surprise that the cost of premiums are also increasing. But thanks to the large number of insurers, we still have a very competitive market.
"With financial uncertainty on the horizon, consumers are actively being encouraged by the FCA to shop around. And for good reason too, as many consumers wrongly assumed that the General Insurance Pricing Practices (GIPP) meant they didn’t have to. However, shopping will, in the majority of instances, save them significant amounts of money. This is a great opportunity for insurers to attract new customers as it's likely that many will want to look for better deals in a time where money is tight. As an industry, it’s important that we come together and do what we can to further support our customers during this time."
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.
WTW’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.
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
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