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Press Release

Car insurance premiums see slight dip in Q3 2019

Insurance Consulting and Technology|Personal Lines
Insurer Solutions

October 11, 2019

Prices fall by 1% to £783 in the last quarter, although drivers are still paying £23 more than they were this time last year.

LONDON, Friday 11 October, 2019 — Comprehensive car insurance premiums have fallen by 1% (£6) in the third quarter of 2019, according to the latest Confused.com Car Insurance Price Index in association with Willis Towers Watson. This decrease reflects an ongoing trend of price fluctuations that has continued for the last 12 months.

The average cost of car insurance is now £783, following a £23 (3%) increase over the past year, 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.

Comprehensive Car Insurance - Quarterly Price Trends

  2018 Q4 2019 Q1 2019 Q2 2019 Q3

Average Premium

£773.66 £762.29 £788.70 £783.28
% Change in Quarter* +2% -1% +3% -1%
£ Change in Quarter* +£14 -£12 +£27 -£6
% Change Annually* -6% -1% +5% +3%
£ Change Annually* -£54 -£5 +£36 +£23

Source: Willis Towers Watson / Confused.com Car Insurance Price Index. *Values rounded to the nearest whole number.

Graham Wright, UK Lead of P&C Personal Lines Pricing at Willis Towers Watson, commented: “The fluctuations in premium levels seen across recent quarters, although relatively minor, reflect the significant uncertainty in the industry at the moment arising from both the implications of the personal injury discount rate change announced in July and the FCA’s interim report on general insurance pricing practices. In particular, the FCA’s report identifies a number of potential remedies, each of which will have some impact on pricing decisions for insurers in the next few months.”

The cost of comprehensive car insurance dropped in most UK regions, with three areas experiencing a quarterly decrease greater than 2%. Drivers in Central & North Wales, the North East of England and North of England were best off with their insurance premiums decreasing on average by 3% (by £20 to £632), 3% (by £18 to £679), 2% (by £16 to £706) respectively. A handful of regions did not benefit from a drop in prices, although with premiums increasing by small margins, including the North West of England ( by £7 to £790), East Midlands (by £5 to £754) and Northern Ireland (by £3 to £942).

More locally focused data shows that drivers in Llandridod Wells in Wales experienced the largest quarterly decrease in prices at 28%, taking their premiums from £688 to £499, followed by West Central London where prices fell by 15% resulting in drivers in that postcode now paying £1,139 compared to £1,338 three months ago1. Llandridod Wells is now also the location offering the best value for car insurance, while East London is the most expensive place in the UK to buy car insurance, with drivers now paying £1,371 to buy car insurance.

Male drivers aged between 17 and 20 are still paying the most of any demographic – although they did see their premiums decrease by 4% - now paying on average £2,312 compared to £2,398 three months ago. The age group that saw the greatest quarterly rise were male drivers aged between 36 and 40, who saw a 2% price increase taking their premiums to £704 from £689.

Graham Wright noted: “Besides the FCA report and the new Ogden rate, the impact of which has yet to be fully costed by insurers, the industry is still grappling with inflation challenges and uncertainty around the impact of the Civil Liability Bill – all of which suggest that the current uncertainty will continue in the coming months.”

The fluctuations in premium levels seen across recent quarters, although relatively minor, reflect the significant uncertainty in the industry.”

Graham Wright
UK Lead of P&C Personal Lines Pricing

Steve Fletcher, Head of Data Insight at Confused.com comments: “There is a lot going on within the insurance industry which is having a tug-of-war effect on prices for new and existing customers. From the unexpected continuation of a negative Ogden discount rate, higher claims costs and current economic uncertainty surrounding Brexit, prices are being pushed up. But there are also fewer younger drivers on the road and more people car-sharing. This, combined with more advanced and efficient analytics to help determine prices, is pulling prices down.

“Currently, the short-term impact of all these factors has meant prices have dropped very slightly over the last few months, but the trend has been increasing since mid-2018, with average reported increases of more than £30. The FCA has discussed measures to encourage fairer pricing for new and returning customers, so we expect to see insurers adjusting their prices. This could see prices for new customers increasing as they offset fairer premiums for renewing 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.

Footnotes

1. While the Shetland Isles also recorded a price decrease in Q3 2019 of -15%, their small sample size mean the results are not considered statistically significant.

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