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Press Release

Car insurance premiums see 5% annual increase

Insurance Consulting and Technology|Personal Lines
Insurer Solutions

July 15, 2019

Comprehensive car insurance prices increase by 3.5% (£27) to £789 in Q2 2019 and by £37 over the past year.

LONDON, Monday 15 July, 2019 — Comprehensive car insurance premiums increased by 3.5% (£27) in the second quarter of 2019, with UK motorists now paying £789 on average, some £37 more than they were paying this time last year, according to the latest Confused.com Car Insurance Price Index in association with Willis Towers Watson.

This latest quarterly increase represents the third rise in prices in the last 12 months and, following a period of price cuts from Q3 2017 to Q2 2018, indicates premiums are likely to continue their upward trajectory in 2019, according to the longest established and most comprehensive car insurance price index in the UK, which is based on price data compiled from almost six million customer quotes per quarter.

Graham Wright, UK Lead of P&C Personal Lines Pricing at Willis Towers Watson, commented: “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.”

The cost of comprehensive car insurance rose across the entire UK, with three regions experiencing a quarterly increase greater than 5%. Drivers in Inner London were hit hardest, with their insurance premiums increasing on average by £61 to £1214, followed by quarterly rises in the North Midlands (£37 to £756) and in the North of England (by £35 to £722). The smallest quarterly increase of 0.5% was seen in the Scottish Borders, marginally increasing average annual premiums to £582, while the South West remains the cheapest region for car insurance, which on average costs £572.

More locally focused data shows that drivers in Llandridod Wells in Wales, previously the cheapest town in the UK for motor insurance, experienced the sharpest rise in prices at 27%, taking their premiums from £542 to £6881. Dorchester is now the location offering the best value for car insurance, with drivers in that postcode paying an average of £542 in the last three months. At the other end of the spectrum, East London is the most expensive place in the UK to buy car insurance, with drivers now paying £1383 to buy car insurance.

Drivers across all ages experienced an increase in prices. Female drivers aged over 71, who benefited most from a price drop in the first quarter of 2019, have seen their premiums swing most sharply in the other direction with a quarterly rise of over 8% in the last three months and over 10% since the same period in 2018, taking their annual premiums to £449. Male drivers aged between 61 and 65 experienced the smallest quarterly rise, with a 1% price increase, taking their annual premiums to £515.

Graham Wright noted: “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.”

Steve Fletcher, Head of Data Insight at Confused.com comments: “This is the first time we have seen car insurance prices increase three months in a row since the Odgen rate change in 2017. There’s a few reasons why they could be accelerating in an upward direction. Aside from the ongoing economic uncertainty we’re all facing and further changes to the Ogden rate, the industry was hit by a super complaint into unfair renewal pricing earlier this year. This means insurers will be looking at how they price for new customers.”

About the index

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.

About confused.com

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.

Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is authorised and regulated by the Financial Conduct Authority.

About Insurance Consulting and Technology

Willis Towers Watson’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.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving in more than 140 countries and markets. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.

Footnote

1. While the Hebrides also recorded larger price increases in Q2 2019, their small sample size mean the results are not considered statistically significant.

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