Quoted car insurance premiums in the UK have recorded their steepest decline in a decade, falling 6.0% in the past three months and 8.8% over the past year, according to the latest Consumer Intelligence Car Insurance Price Index.
The recent quarterly drop is the largest since Consumer Intelligence began tracking premiums in October 2013. The data shows that drivers under 25 experienced an 8.1% decline in quoted premiums since October 2023, though their annual decrease was only 0.1%.
Drivers in Wales saw the most significant decrease, with quoted premiums falling 18.5% over the past year and 8.4% in the last three months.
Other regions experiencing double-digit annual declines include Yorkshire & The Humber (13.2%), the West Midlands (12.0%), and the Eastern region (10.4%). Scotland recorded the smallest annual decline at 3.7%.
The most common quoted premium fell between £250 and £499, accounting for 25% of all quotes, while 22% of drivers received quotes between £500 and £750. In January 2024, 62% of drivers obtained quotes below £750 through price comparison websites, compared to 49% the previous year.
Max Thompson (pictured above), insurance insight manager at Consumer Intelligence, noted an increase in the number of brands advertising price reductions on price comparison websites. He attributed this in part to the rise in tiered products but also suggested it reflects the competitive pricing environment.
The new Ogden rate of +0.5%, which took effect on January 11, has influenced the market, particularly benefiting younger drivers by reducing settlements for long-term damages. However, Thompson observed that fewer brands appear at the top of search results for younger drivers, making the market more reliant on a smaller number of insurers.
While car insurance premiums are on a downward trend, quoted van insurance premiums in the UK went up by 6.9% in the 12 months to the end of November, Consumer Intelligence says. That said, the data also suggests a slowdown in price increases, with premiums for drivers using vans for work dropping by 0.7% over the past six months.
Since Consumer Intelligence began collecting data in 2013, average quoted premiums have increased by 103.9%. Drivers over 50 have experienced the largest rise at 132.0%, while premiums for drivers aged 25 to 49 have risen by 124.1%. The under-25s have seen the smallest increase at 33.0%.
Over the past three months, quoted premiums for under-25s dropped the most at 8.1%, compared to 5.7% for those aged 25 to 49 and 5.5% for the over-50s. However, on an annual basis, under-25s saw only a 0.1% decrease, while premiums for those aged 25 to 49 fell by 8.0% and for the over-50s by 14.3%.
The use of telematics in insurance quotes has increased. The proportion of rank one to five quotes from telematics providers rose to 17% in January, up from 13% in October.
Among younger drivers, 38% of the top five quotes were from telematics providers, up from 35% in October. The proportion also rose for drivers aged 25 to 49, increasing to 15% from 12%, while for the over-50s, it increased to 9% from 7%.
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