The cost of car insurance may be about to change with new rules on pricing coming into effect and after months of Covid-related contractions, according to Consumer Intelligence.
The market intelligence firm has noted that car insurance premiums have edged downwards by 0.6% in the last three months while some UK regions have even begun to see rises for the first time in more than a year. The average motor premium in the UK is now £782.
Prior to this quarter and earlier in the pandemic, premiums had plummeted due to stricter Covid restrictions, Consumer Intelligence explained, when fewer cars were on the road, which had brought about a reduction in accidents and claims.
Today, insurers appear to be jostling for position in response to the new rules to tackle price walking, according to Harriet Devonald, Consumer Intelligence’s insurance pricing expert.
Devonald said: “It’s a complicated market, and we’re seeing a lot of different strategies in play. Ahead of 1 Jan, we saw some insurers being aggressive, perhaps chasing volume ahead of GIPP but I wouldn’t say anyone appeared to go ‘all-out’ on that tactic. Others are conspicuously subdued and steady in their competitive performance, doing the bare minimum to keep up with the market and maintain at least a solid baseline of competitive presence.”
“We see this with some of the bigger players, likely with larger back-books—so, perhaps, they’ve been investing in maintaining those back-books at GIPP-ready rates. However, other brands seem to have been focused on the product side when it comes to new business—rolling out tiered products.
“It all bodes for an interesting few months ahead in the UK motor insurance market.”