Comprehensive car insurance premiums increased by an average of 1% (£8) in Q3 2018, suggesting a stabilisation in prices after previously falling at their fastest rate since 2014, according to Confused.com and Willis Towers Watson.
This small increase brings an end to the series of significant price cuts across four consecutive quarters from Q3 2017 to Q2 2018, which saw premiums fall to £752 following a price peak of £847 in Q2 2017.
UK motorists are now paying £760 on average, which is still £78 (9%) less than they were paying this time last year, according to the Confused.com Car Insurance Price Index in association with Willis Towers Watson, which is based on price data compiled from more than six million customer quotes per quarter.
Stephen Jones, UK head of property and casualty pricing, claims, product and underwriting at Willis Towers Watson, commented: “The significant reductions seen over the past year would have been difficult to sustain due to ongoing pressures on repair costs and the continued uncertainty surrounding both the timing and impact of the Civil Liability Bill and the anticipated adjustment to the Ogden rate.”
In response to the unveiling of the Civil Liability Bill in March, which proposed reforms to the way the largest personal injury and smaller whiplash claims are calculated, insurers may have begun to price in the anticipated claims cost reductions, contributing to the recent fall in prices, according to Willis Towers Watson.
But the government legislation is still making its way through parliament and, as previously warned by Willis Towers Watson, Brexit could delay its passage and any benefits to insurers, pushing back its implementation date from April 2019.
Steve Fletcher, Head of Data Insight at Confused.com, commented: “Despite the decline in car insurance prices we have witnessed over the past year, it seems premiums are going up again and this time following a drop of just £100.”
“The last time we saw a downward trend, premiums dropped by £279, but over a much longer period of three years. The data from this quarter suggests premiums are on the up and this time starting at a much higher base, which could mean the cost of car insurance could reach new highs. We expect this is due to drivers adopting vehicles with increasingly advanced technology, which makes for more expensive claims. It could also be a reflection of the uncertainty that surrounds the UK with Brexit on the horizon.”
The Civil Liability, meanwhile, is set to enter the report stage and receive its third reading in the House of Commons on 23 October.
Stephen Cavalier, chief executive of Thompsons Solicitors, said: “The Civil Liability Bill and the associated changes to the small claims limit are deliberate, cynical attacks on access to justice by the government. Like the introduction of fees in employment tribunals, it places barriers in the way of working people claiming what is rightfully theirs—in this case damages for workplace injuries.”
“This would affect up to 350,000 people a year and put power even more firmly in the hands of employers and their insurers. The proposals need to be stopped now.”