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Press Release

UK car insurance premiums fall to lowest level in more than five years

Insurance Consulting and Technology|Personal Lines
|Insurer Solutions

July 21, 2021

Motorists are now paying £522, which is £71 less than 12 months ago, following a significant drop in insurance claims during successive lockdowns

LONDON, July 21, 2021 — Comprehensive car insurance premiums have fallen by 12% (£71) since the second quarter of 2020, with UK motorists now paying £522 on average. According to the latest Confused.com Car Insurance Price Index in association with Willis Towers Watson, this is the second biggest annual drop since 2014 and prices have now fallen for three consecutive quarters.

Premiums are now the cheapest they have been since early 2016, after falling by 3% (£16) in the second quarter of 2021, according to results from the Index, which is the most comprehensive car insurance price index1 in the UK and based on price data compiled from almost six million customer quotes per quarter.

Comprehensive Car Insurance

Comprehensive Car Insurance - Quarterly Price Trends
2020 Q2 2021 Q2
Average Premium* £593 £522
% Change in Quarter* -5% -3%
£ Change in Quarter* -£32 -£16
% Change Annually* -3% -12%
£ Change Annually* -£17 -£71

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: “Fewer claims during successive COVID-19 lockdowns have sustained the current downward trend for premiums across the board, with insurers continuing to pass on savings to customers. However, with more cars expected to return to the road when lockdown rules are eased further from 19 July, the increase in miles driven risks pushing premiums in the opposite direction towards pre-pandemic prices.”

From April to June 2021, the cost of comprehensive car insurance has been on a downward trend across every region in the UK, except for Northern Ireland which saw a 1% rise in premiums. Drivers in the Inner London and the Manchester/Merseyside region benefited from the greatest quarterly drop in prices, with their insurance premiums decreasing on average by 5% to £808 and £675 respectively.

More locally focused data shows that drivers in the City of London and West London benefited from the greatest quarterly fall of 8%, reducing the premiums of drivers in these areas to £722 and £721 respectively. The next biggest fall was seen in Perth, which experienced a 7% drop in prices, where drivers were paying an average of £331 in the last three months.

Despite a 6% drop in prices, West Central London remains the most expensive place in the UK to buy car insurance, with drivers now paying on average £981. At the other end of the scale, the cheapest town is now Llandrindod Wells in Wales, where drivers were paying an average of £319 in the second quarter of 2021 for comprehensive car insurance.

Female drivers aged 71 or over benefited from the greatest price fall, compared to other age groups, seeing a 4% quarterly price decrease, taking their annual premiums to £331. Meanwhile, female drivers aged between 17 and 20 and male drivers aged between 66 and 70 experienced the smallest drop in prices of 2%, with annual premiums decreasing from £1062 to £1041 for females aged 17 to 20 and from £339 to £333 for males aged 66 to 70.

With so many challenges in play at the same time, the personal lines industry is braced for one of the most turbulent times in its history.”

Graham Wright,
UK Lead of P&C Personal Lines Pricing at Willis Towers Watson

Graham Wright said: “Even without the pandemic, the regulatory reforms sweeping across the sector, including the FCA’s ban on general insurance price walking and Ministry of Justice whiplash reforms, are creating simultaneous pressure for prices to both rise and fall respectively. With so many challenges in play at the same time, the personal lines industry is braced for one of the most turbulent times in its history.”

Louise O’Shea, CEO at Confused.com comments: “The turbulence of the last 18 months has been a key factor in how driving behaviours have changed, which is reflected in the cost of car insurance now. How long this will last will be hard to tell. With the easing of restrictions, the number of motorists on the road is likely to rise and this will undoubtedly be reflected in the price of insurance premiums.

“Between the upcoming FCA changes, which will spell out a period of uncertainty within the industry, and the price of fuel skyrocketing, among other motoring costs, it’s never been more prevalent a time for motorists to shop around.”

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.

The Confused.com car insurance price index has been running for more than 10 years. In this time, the price comparison market has grown significantly (80% market share), and the make-up of the UK driving population has changed along with it. We’ve been monitoring trends within the car insurance industry, and have updated our method utilising machine learning techniques to one that reflects today’s UK motor market. This has resulted in an adjustment to the car insurance prices reported in our index.

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 Q1 2021 saw the introduction of Willis Towers Watson’s updated calculation methodology, ensuring the Index continues to provide the most accurate view of today’s market. For this reason, comparisons with results from this quarter have been calculated based solely on values generated by the new Index.

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