But competition in the commercial sector keeps premiums flat
The cost of a typical consumer’s insurance basket has fallen by 5.5% over Q1 2014 compared to the same period in the previous year, according to the Biba-Acturis Insurance Price Index.
The index also reveals that for the second consecutive year, motor insurance prices have fallen by 5.5%, as have household policies despite the recent floods.
Biba chief executive Steve White said this represented good news for consumers.
“It is positive news for consumers,” he said. “Premiums are continuing to drop because of the progress that the industry has made with reducing uninsured driving and the reforms to the legal system which have reduced the cost of claims. Insurance brokers are telling us that strong competition is also helping to drive the reduction.”
Meanwhile, the cost of insurance for small to medium sized enterprises (SMEs) has remained relatively flat on an aggregate basis.
The cost of commercial motor insurance has reduced by 2% over Q1 2014 compared to the same period in the previous year, but this was largely offset by a 3% increase in commercial package premiums.
Acturis co-chief executive Theo Duchen said capacity and competition was the main driver behind the stationary pricing.
“Premiums in the commercial market remain fairly flat,” he said. “This is largely down to a large amount of capacity and competition. Premiums also appear not to have been impacted by any major claims events recently, which helps to maintain premium levels.”
And the picture is similar for larger commercial enterprises and tradesmen such as plumbers.
Shopping baskets for both classes of business have remained broadly the same since 2010, with the price of larger commercial liability policies increasing slightly over the last 12 months after a period of small decreases. The price of tradesman’s packaged policies increased by 5% compared to Q1 2013, but this was offset by the 2% reduction in commercial motor rates.