Auto insurance premiums fall for first time in three years


"Insurers feel confident in calming their premiums, and our quotes data shows prices are down annually for the first time in three years", head of data insight, Steve Fletcher, said.

As usual, the biggest premium is paid by male drivers aged between 17 and 20 - £2,348 on average, compared to the £1,699 paid by their female counterparts. Although insurers can't set premiums based on gender, women generally pay less because they have fewer high-value claims and motoring convictions.

European Union gender rules stop insurers from assess drivers based on their gender, but there are other risk factors which cause men to have higher premiums.

Stephen Jones, UK Head of P&C Pricing, Claims, Product and Underwriting at Willis Towers Watson, commented: "A third quarterly drop and annual deceleration in premiums indicates the industry clearly expects the new Civil Liability Bill to lead to a positive discount rate and, as one would expect in such a highly competitive market, these cost benefits are being passed through to consumers". "The government has also announced a reform to the way whiplash claims are calculated and paid, which may have also had an impact", it said. also carried out a survey of 2,000 drivers and found that loyalty did not pay as those who stayed with the same insurer and renewed their auto insurance between January and March this year saw their premiums go up by £45 on average.

It also confirmed plans to reverse last year's changes to the Ogden rate - which is used to calculate injury compensation - after hearing insurers' complaints that victims were being overcompensated. In September a year ago, the government backtracked after the insurers said the new formula would overcompensate crash victims.

Obiter welcomes news this morning that vehicle insurance costs have come down £13 on average since past year.

Aside from analysis of the market, Confused also faced another problem: lower prices surely means people need to do less shopping around and - this is where it gets awkward - less scouting of comparison sites?

Meanwhile, the government last month announced measures to curb the high number of whiplash claims that cost United Kingdom drivers more than £1bn a year. Motorists in inner London have seen the biggest fall, down 6%, although they still pay the highest premiums at more than £1,000 a year on average.