Average motor premium dropped 2.9% in Q4 2012

The average motor premium for a comprehensive policy fell by 2.9% in the three months to 31 December 2012 to £789, according to AA Insurance’s latest premium index.

The AA’s previous premium index, for Q3 2012, showed that the same premium fell 2.9% to £844.

The broker’s research also found that the average quote from aggregators fell by 2.6% to £596.

But the AA said that the EU Gender Ruling had skewed the figures. AA director Simon Douglas said: “Never has an average been so meaningless.

“Certainly, average premiums are falling but they mask considerable extremes for individual groups. 

“Many commentators – and indeed some from the industry – have made unhelpful generalisations. Headlines saying premiums have increased by 50% for young women don’t paint a true picture of what is actually happening.”

The AA index suggests that the average premium increase for women aged 17 to 22 is just 4.7%, while men in the same age group have seen an average reduction of 1.9%.

Douglas said that the gender ruling had caused insurers to reset their rating strategies. He said: “They have gone back to square one in calculating risk. 

“Legitimate proxies for gender, such as occupation or the type of car driven will significantly influence premiums, but each insurer will calculate their quotes based on their own interpretation. 

“As a result, some men are seeing unexpected premium increases and some women decreases.”

Older female drivers have seen average premiums fall, although at a lesser rate than for men. The survey found that while quotes for women aged 40 to 49 have dropped by 3.2%, those for men in the same age group have fallen by 5.5%.

Douglas said that he expected average motor premiums to keep dropping.

The AA’s research is based on finding the average of the cheapest five quotes from a range of insurers against different motoring risks.