LONDON, April 20, 2023 — Motorists are now paying £107 more for their car insurance compared to the same period last year, according to the latest Confused.com Car Insurance Price Index in association with WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.
Comprehensive car insurance premiums have risen by 20% during the last 12 months, with UK motorists now paying £657 on average. The average cost of a comprehensive car insurance policy is now the most expensive it has been since 2011.
Car insurance premiums have also increased for six straight quarters following a price rise of 4% (£28) in the first quarter of 2023, 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.
| 2022 Q1 | 2023 Q1 | |
|---|---|---|
| Average Premium* | £550 | £657 |
| % Change in Quarter* | +4% | +4% |
| £ Change in Quarter* | +£21 | +£28 |
| % Change Annually* | +2% | +20% |
| £ Change Annually* | +£12 | +£107 |
The rate of inflation in the UK has been over 10% for six consecutive months and remains close to a 40-year high, directly impacting insurers and the higher costs they face, which are becoming increasingly challenging to absorb.
“Fast-paced inflation throughout the UK economy has driven up the costs insurers face in fulfilling claims, such as rocketing motor repair, parts and labour prices, that have in turn seen premiums surge.”
Tim Rourke | UK Head of P&C Pricing, Product, Claims and Underwriting at WTW
Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW, said: “Fast-paced inflation throughout the UK economy has driven up the costs insurers face in fulfilling claims, such as rocketing motor repair, parts and labour prices, that have in turn seen premiums surge.”
Price rises have been particularly severe for drivers of cars up to eight years old, which have been subject to annual increases of more than 20%, topped by 27% for drivers of three-year-old cars. Similarly, higher priced cars have been subject to much more severe increases over the last year, with annual increases exceeding 30% for cars worth over £30,000, peaking at a rate of 37% for cars worth over £40,000.
All regions across the UK recorded double-digit price rises in insurance premiums over the last 12 months. Drivers in London saw the largest percentage increases in the cost of comprehensive car insurance, where drivers saw an annual rise of 23%, with average premiums now costing £1067 in Inner London and £845 in Outer London. The smallest annual increases were seen in the South West of England and the Scottish Borders, where drivers still saw a significant annual rise of 16%, with average premiums now costing £434 and £428 respectively.
The South West of England also continues to be the cheapest region for car insurance. Meanwhile, Manchester / Merseyside (£814) and the West Midlands (£787) remain the most expensive areas outside of the capital.
| 2022 Q1 | 2023 Q1 | |
|---|---|---|
| Inner London | £864 | £1067 |
| Outer London | £687 | £845 |
| Manchester / Merseyside | £697 | £814 |
| West Midlands | £657 | £787 |
| Leeds / Sheffield | £627 | £745 |
More locally focused data shows motorists in West London experienced the sharpest annual rises of 26% taking their average premiums to £1002. By contrast, Liverpool saw the lowest (yet still considerable) rise of 14% in this year’s first quarter, taking average premiums for drivers in that city to £786.
West Central London continues to be the most expensive postcode in the country where drivers now pay an average bill of £1276, while Llandrindod Wells in Wales remains the cheapest town in the UK with prices on average now costing £410.1
Drivers aged 17-20 took the largest hit of any age group, with male drivers in that age bracket experiencing a percentage increase of 29% (£437) and female drivers seeing their premiums surge by 30% (£316) during the last 12 months, taking their premiums to £1930 and £1360 respectively.
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.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.
1 While the Hebrides recorded a lower car insurance premium for Q1 2023, a small sample size mean the results are not considered statistically significant.
