The Association of British Insurers (ABI) has called on the Government to publish a framework and timetable for its Discount Rate reforms after revealing that the cost of the average motor insurance premium has leapt by £45 to a record high in the last year.
The ABI’s Motor Premium Tracker, which is the only published indicator of the actual premiums paid by customers rather than prices quoted, has discovered that motor premiums are now at an average of £485 following a 10% rise on the same quarter last year.
With Insurance Premium Tax (IPT) at 12% having doubled in two years, and average repair bills up by a third in the last four years, the ABI has urged the Government to implement its proposals to reform the Discount Rate as quickly as possible to help give some relief to “cash-squeezed motorists”.
Rob Cummings, head of motor and liability at the ABI, said: “The UK Government’s proposals to deliver a personal injury compensation system that is fair for claimants, customers and taxpayers alike should help ease the pressure on motor insurance premiums.
“We urge the Government to publish a framework and timetable for making these reforms a reality so that we have in place a system that provides full compensation to claimants and benefits insurance customers, as well as other compensators like the NHS.
“And in the forthcoming Budget, the Chancellor must resist any temptation to further increase the rate of Insurance Premium Tax,” he added.