Car insurance costs heading for record high despite Q3 fall
Car insurance prices are on course to be the most expensive on record next year, despite a fall in premiums in the last quarter.
Data from the latest Confused.com Car Insurance Price Index in association with broker Willis Towers Watson finds that comprehensive car insurance premiums were down by an average of 1.1% in the third quarter of 2017, the largest quarterly reduction in premiums seen in more than three years.
The fall means that the average comprehensive premium is now £838 per year; £9 lower than in June 2017 but reflecting a 14% rise over the past 12 months and 65% over the last decade.
According to Willis Towers Watson, the reduced prices this quarter reflect in particular insurers’ reactions to the recent announcement of a proposed change in the basis of the calculation of the Ogden discount rate, which determines the basis of settlement and so cost to insurers of the very largest personal injury claims.
However, the slight fall in premiums in Q3 is expected to be short lived as prices were already on the rise again in September.
Stephen Jones, UK head of P&C pricing, claims, product and underwriting at Willis Towers Watson, commented: “With uncertainty still surrounding the Ogden discount rate, as well as unknown timings around the Civil Liability Bill, pressures on repair costs from the weakness of sterling and increasing repair complexity, plus the possibility of further increases in Insurance Premium Tax towards the VAT rate, there is still considerable uncertainty in the market around the future direction of rates.”For more of the latest industry news, click here.