Confused/Towers Watson index indicates a slowdown in rate falls

UK motor insurers’ share prices have been boosted by the release of the latest Confused/Towers Watson car insurance price index today.

The index showed that the motor rate falls insurers suffered throughout 2013 slowed down at the end of the year.

Admiral’s share price has increased 6.5% in today’s trading so far, making it one of the biggest risers in the FTSE 100 index today. It is currently trading at 1,414.85p, compared with yesterday’s closing price of 1,326p.

Similarly, Esure’s share price is up 5.54% to 282.95p, and Direct Line Group’s share price has risen 3.99% to 265.60p.

The latest Confused/Towers Watson car insurance price index showed that there had been a 13% drop in the average motor premium over 2013.

But over the fourth quarter of 2013 prices fell by an average of just 1%, compared with 8% and 4% drops in the second and third quarters respectively.

According to Towers Watson UK non-life insurance leader Karl Murphy, this shows that insurers are starting to believe they have been too severe with price cuts in response to the expected benefits of the Legal Aid, Sentencing and Punishment of Offenders Act reforms.

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