Context
According to the ABI’s latest Motor Insurance Premium Tracker the average price paid by motorists for their motor insurance in the second quarter of this year rose slightly on the previous quarter to £419. The ABI has warned for some time that insurers are finding it increasingly challenging to absorb rising cost pressures, such as higher second-hand car prices and more expensive vehicle repairs.
The ABI’s Tracker is the only survey that looks at the price consumers pay for their cover, rather than the price they are quoted.
Key points to note
The latest Tracker shows that in the second quarter of 2022:
- The average premium paid for private motor insurance rose by £5 (1.3%) on the previous quarter. However, this is still £11 lower than the same quarter in 2021.
- While still too early to fully assess the impact of the FCA’s changes to the rules on the pricing of motor and home insurance introduced on 1st January 2022, indications show an increase in the difference between new and renewed average premiums paid. The average premium paid for a new policy in the second quarter was £129 higher than for a renewed policy. Average premiums for new policies increased by 3% to £500 and average premiums for renewed policies increased by 0.5% to £371.
Next actions
None – for information and awareness.