Comprehensive car insurance premiums in the UK have dropped by 17% over the past 12 months, equating to a £164 reduction, according to the latest Confused.com Car Insurance Price Index produced in partnership with WTW.
The average premium now stands at £777, marking the largest annual percentage decrease recorded since 2014.
The decline follows a shift in pricing trends that began in the first quarter of 2024. The index is based on price data from across the market and is regarded as one of the most detailed sources of motor insurance pricing information in the UK.
Tim Rourke (pictured above), UK head of P&C pricing, product, claims and underwriting at WTW, said that lower claims frequency and reduced average repair costs have allowed insurers to make pricing adjustments.
Premiums fell across all UK regions in the past year. Inner London recorded the largest annual decline at 20%, but still holds the highest average cost at £1,208. The smallest reduction occurred in South West England, where premiums declined by 12% to £532.
Central and North Wales has become the region with the lowest average premium, now at £523. The West Midlands is the most expensive region outside London, with premiums averaging £943.
Within London, drivers in South West London experienced the steepest regional drop, with premiums falling by 21% from £1,351 to £1,061. West Central London remains the highest-cost postcode area in the UK, with an average premium of £1,430.
The lowest average premiums continue to be found in Llandrindod Wells, where the typical annual cost is £455, the only area with prices below £500.
By age group, drivers aged 17 and 18 saw the largest reductions in premiums, with 23% decreases bringing their average premiums to £2,258 and £2,434 respectively. Drivers aged 50 saw the smallest annual reduction, down 11%, or £83, to an average of £655.
Confused.com CEO Steve Dukes noted that car insurance prices have declined across most age groups and regions, with younger drivers having seen the most notable reductions.
The findings of the latest index show improvements in car insurance premiums in the past year. At the start of 2024, the average comprehensive car insurance premium rose to £635, marking a 1% increase from the previous quarter and a 33% rise compared to the same period in 2023.
Following this uptick, premiums began to decline. The second quarter saw a 2% drop, bringing the average premium to £622. This downward trend continued, with premiums falling for four consecutive quarters, culminating in a significant annual reduction of 19% by the year's end – the largest in over a decade.
Early in the year, insurers faced increased expenses due to higher repair costs, escalating vehicle thefts, and inflationary pressures affecting labour and parts. These challenges contributed to the initial rise in premiums.
What are your thoughts on this story? Please feel free to share your comments below.
