But decline in home premiums begins to slow
Home and motor insurance premiums have fallen 6.8% over the past year, according to Biba and the Acturis Insurance Price Index.
Premiums across both lines fell by 4.9% in Q2 2014, compared with the same period in 2013 and coincided with an inflation rate of 1.9% to give a real term fall of 6.8%.
The Biba and Acturis insurance price index, which measures nearly £5bn of premium per annum, shows that the premiums paid in its consumer insurance ‘shopping basket’ have continued to reduce.
Acturis and Biba said the downward trend was evident across both lines, but that the decline in the home insurance market was slowing. Home insurance premiums fell by 4.2% in Q2 compared with 5.4% in Q1 2014.
Biba executive director Graeme Trudgill said: “Overall this is great news for customers and shows that the government and industry initiatives are working to reduce the cost of motor insurance.
“We look forward to seeing further plans coming from the government such as the young driver Green Paper from the Department for Transport.”
The Acturish index also revealed that commercial vehicle policies increased by 0.2% for the first time since Q3 2012, while the mid-market saw a 0.4% drop in average premiums over the first two quarters of the year.
Acturis co-chief executive Theo Duchen said: “There have been interesting developments in the SME index during Q2 this year. The small increase to commercial vehicle policies is likely to be the result of some insurers withdrawing from the market, but this is countered by continued intense competition in the property and liability elements of the index.
“We will continue to monitor this during the next quarter to see if this trend settles or continues.”