Comprehensive car insurance premiums in the UK have fallen by 2% (£21) between July and September 2024, with motorists now paying an average of £861, according to the latest Confused.com Car Insurance Price Index in collaboration with WTW.
The index, which compiles data from over six million customer quotes per quarter, reveals a continued decline in premiums after a two-year rise, marking the third consecutive quarter of decreases.
The report shows that car insurance premiums fell by 5% (£54) in the first quarter of 2024 and by 6% (£59) in the second quarter. On an annual basis, premiums have decreased by 7% (£63), the first annual reduction since 2021.
WTW highlighted that the reduced premiums reflect lower claims frequency in 2024, influenced by factors such as reduced speed limits and the shift to hybrid working arrangements. Many consumers are also opting for higher policy excesses to lower their insurance costs.
Tim Rourke (pictured above), UK head of P&C pricing, product, claims and underwriting at WTW, noted that the trend in premium reductions has moderated due to persistent inflation affecting certain types of claims.
“This reflects a basket of influences, including action on reducing speed limits, the increasing maturity of workers’ hybrid working arrangements, and consumers increasingly choosing slightly higher policy excesses to reduce their insurance costs,” Rourke said.
Across the UK, most regions experienced declines in comprehensive car insurance costs during the last three months. Outer London saw the largest drop, with premiums decreasing by 4%, bringing the average cost to £1,104.
Other regions saw declines ranging from 1% to 4%, except for South West England, West England, and Central and North Wales, where premiums remained flat.
Despite stagnant prices in the South West, it remains the least expensive region for car insurance, with an average premium of £571. Inner London saw a 3% decrease, reducing average premiums to £1,357, though it continues to be the most expensive region.
The West Midlands remains the costliest area outside of London, with premiums averaging £1,068 following a 1% reduction.
More detailed analysis from WTW shows that motorists in the Isle of Man experienced the largest quarterly drop, with premiums falling by 9%, bringing the average cost to £469. In contrast, West Central London remains the most expensive postcode area, with drivers paying an average of £1,738 for their car insurance.
Drivers aged 70 benefited the most from the recent price falls, with a 7% (£32) quarterly reduction bringing their premiums to £454, the lowest average cost among age groups.
However, not all age groups saw similar declines. Motorists aged 32 and those between 49 and 51 saw little or no change in their premiums.
Steve Dukes, CEO of Confused.com, commented on the continued importance of shopping around for car insurance despite falling premiums.
“The insurance market today is a lot broader, with insurers expanding their product ranges and new brands coming to market, creating more choice for customers looking to find a policy that’s suitable for them at a better price,” Dukes said. “But with this also comes a lot of competition between insurers. And what we’re seeing is insurers investing in data and technology in order to focus on acquiring their target customers. This level of specialist data analysis is crucial for insurers to remain competitive and relevant in a very dynamic market.”
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