Quoted motor insurance premiums ‘jump by 56.4% in year to February’

The average quoted price of car insurance jumped by 56.4% in the year to February but there were some signs of a slowdown, according to an index.

In February, drivers most commonly received a quote between £500 and £749, insights firm Consumer Intelligence said.

The latest annual rise is lower than the 67.2% recorded in the year to the end of November, it added.

However, it is still the third-highest annual increase recorded by Consumer Intelligence since it started tracking data in October 2012.

The three months to February saw quotes increase by 0.5%, marking the lowest quarterly increase since November 2021. Some parts of the UK, including Wales, the North East and North West of England, and Yorkshire and the Humber, saw quoted premiums fall over the quarter.

Max Thompson, insurance insight manager at Consumer Intelligence said: “The new year saw some major brands make competitive movements and reduce premiums.

“However some of this was unwound in February indicating it may have been more of a tactical move than a long-term trend.”

The research looks at the average of the five cheapest premiums returned on price comparison websites.

Researchers said telematics providers accounted for 15% of the top five quotes, down from 18% in the three months to the end of November.

Telematics policies use technology to measure how a vehicle is being driven. The policies help insurers to offer premiums that are more tailored to the users of a vehicle.

Among the under-25s, the proportion of top five quotes from telematics providers dropped to 36%, marking the lowest since May 2016, Consumer Intelligence said.

Jonathan Fong, manager of general insurance policy at the Association of British Insurers (ABI) said: “Insurers are aware of the financial challenges customers are facing and are determined to keep motor insurance as competitively priced as possible.

“Our motor premium tracker is the only collection based on the price customers pay for their policy, rather than quotes, and shows that the average motor premium increased by 25% last year to £543.

“This was largely driven by above inflation increases in the cost of repairs, thefts and replacement cars, which contributed to insurers paying out a record £9.9 billion in claims for the same period – an average of £1.13 million per hour.

“As an industry, we’re committed to supporting customers and finding ways to help tackle the cost of providing motor insurance. Our 10-point roadmap to combat the rising costs encourages greater collaboration with government and relevant stakeholders.”

The ABI also said it had called for a cut to the insurance premium tax, a cost which is levied on insurers but is passed onto consumers through the cost of their policies.

It has previously said that, adjusting for inflation, the average total cost of a settled car claim has increased by 23% from £3,500 in 2014 to £4,300 in 2023. Over the same period, also adjusted for inflation, the average premium rose by 8%, from £505 to £543, according to the ABI’s figures.

Here are annual increases in quoted premiums across Britain in February, according to Consumer Intelligence:

– London, 64.8%

– Scotland, 61.9%

– West Midlands, 61.2%

– South East, 60.9%

– Eastern England, 57.7%

– North East, 55.5%

– East Midlands, 52.8%

– South West, 50.9%

– North West, 50.8%

– Yorkshire and the Humber, 49.8%

– Wales, 47.5%