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July 16, 2019

Cost of car insurance in UK rises 3.5% in second quarter

The premium of a yearly comprehensive car insurance policy in the UK rose 3.5% (£27) in the second quarter of 2019 due to increasing cost of claims.

According to the latest index from price comparison site Confused.com, compiled by Willis Towers Watson , the average premium for a comprehensive policy is now £789, which is £37 more than British motorists were paying a year ago.

This latest quarterly increase in car insurance represents the third rise in the last one year and comes after a period of price cuts from third quarter of 2017 to second quarter of 2018.

The latest trend, according to the report, suggests that the premiums are expected to continue rising this year.

Willis Towers Watson UK Lead of property and casualty personal lines pricing Graham Wright said: “Hikes to Insurance Premium Tax and changes to the personal injury discount rate have been key drivers behind prices fluctuating up and down over the last two years.

“With the implementation of whiplash reforms now delayed until April 2020, to allow testing of the new online portal for motor claims, underlying cost pressures on premiums look set to continue for some time.”

Car-owners in the Inner London were the worst affected as their insurance premiums increased on average by £61 to £1214.

Remaining two UK regions experienced a quarterly increase of more than 5% including North Midlands (£37 to £756) and in the North of England (by £35 to £722).

The least increase of 0.5% was seen in the Scottish Borders where it increased to average annual premiums to £582, while the South West with average costs of £572 remains the cheapest region for car insurance.

Graham Wright added: “In addition to delays to the whiplash reforms, adjustments to insurer pricing strategies against a backdrop of potential regulatory intervention, together with ongoing claims inflation pressures driven by wider economic uncertainty, are likely to be further factors behind the recent movements.”

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