- Overall average premiums increased by 2.7% in the past 12 months
- However, in the last 3 months, average premiums have fallen by 1.4%
Despite an overall increase of 2.7% in the last 12 months, average premiums for UK motorists began to fall as the country went into lockdown, according to the latest research from insurance market benchmarking specialist, Consumer Intelligence.
Average premiums now stand at £876 following a 1.4% fall in the last three months, most likely a result of the global pandemic.
John Blevins, pricing expert at Consumer Intelligence says: “With fewer cars on the road and the subsequent reduction in claims, it seems some of those savings may be making their way back to customers via reduced premiums.”
Age differences
The past 3 months have seen all age cohorts average premiums reduced. Under 25s by 1%, 25-49 by 1.4% and Over 50s by 1.5%.
In the last year, the cost of motor insurance for the under 25s has remained static, with a net movement of 0%. However, this age group has seen the biggest reduction in premiums over the longer term – a 20.3% fall since Consumer Intelligence started tracking average premiums in October 2013 – largely driven by the emergence of telematics policies. The average premium now sits at £1912.
Blevins says: “Once again the telematics offerings are keeping premiums down for the under 25s. The proportion of the cheapest prices being offered to this age group by a telematics provider is 53%. This has reduced however from 63% in May 2019. This would suggest more mainstream products are offering competitive pricing for these younger drivers without the black box technology.”
25 -49-year-olds have seen an increase of 3.2% in the last 12 months, with the over 50s witnessing a 3.6% increase. Average premiums are currently £655 and £392 respectively.
Regional differences
London remain the most expensive region in the UK for car insurance and also saw the largest rise of the past 12 months (5.7%). However, a reduction of 0.6% has been seen in the past 3 months. The average premium for motorists living in the capital is currently £1503.
North West (£1059) and West Midlands (£952) are the next most expensive regions. The North West region did, however, see the 2nd largest price reduction in the past 3 months (2.8%). The South West saw the largest reduction of 3.3%.
Currently Scotland has the lowest premiums of all UK regions (£543) despite increases of 3.4% over the past 12 months.
Blevins adds: “Regional pricing will be dictated by claims experience and crime rates. Both of which has fallen during the current pandemic. Less people on the roads and more cars parked safely at home.”
| Region | Price change seen over the last 12 months (May '19 – May '20) |
Price Index Last 3 months (Feb '20 – May '20) |
May 2020 Average Premium (5 cheapest) |
| London | 5.7% | -0.6% | £1,503 |
| E Midlands | 4.2% | -1.3% | £888 |
| Wales | 3.5% | -2.3% | £662 |
| Yorks & Humb | 3.5% | -0.2% | £808 |
| Scotland | 3.4% | -0.2% | £543 |
| W Midlands | 3.3% | -1.6% | £952 |
| NW | 2.1% | -2.8% | £1,059 |
| Eastern | 2.0% | -0.7% | £700 |
| NE | 1.0% | -2.7% | £812 |
| SE | 0.4% | -0.4% | £708 |
| SW | 0.1% | -3.3% | £603 |
Car Insurance Price Index [free to download]
The Consumer Intelligence Car Insurance Price Index is the independent authoritative source of price movements in the car insurance market, compiled using real customer quotes from price comparison websites (PCWs) and
key direct providers.
The data is used by the Office for National Statistics, regulators and insurance providers as the definitive benchmark of how price is changing for consumers.
Ends
Notes to Editors
1.The cheapest premiums were calculated by comparing the prices offered for 3,600 people by all the major Price Comparison Sites and key direct insurers. The top 5 prices for each person were compared to the previous month’s top 5, then these variations averaged to produce the index.
About Consumer Intelligence
Consumer Intelligence is data analytics company that helps businesses execute great customer strategies. For 16 years the company has been benchmarking the insurance market and retail banks in the UK and beyond. The unique combination of benchmark data, consumer research and extensive experience has helped some of the world’s major brands focus on delivering better services to customers and improving their own business performance as a result. For more information, visit the website www.consumerintelligence.com
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