AA index shows 22% premium rises
The motor market has taken a step closer to profitability with an average premium rise of 3.1%, or £22, for the last quarter, according to the AA British Premium Index.
Over the year, quoted premiums have risen by £50 or 7.6%, to an average of £724.28.
The average quoted premium for third-party, fire and theft cover has reduced fractionally, by 0.6% to £879.
Simon Douglas, director of AA Insurance, said: “Despite these rises, the car insurance industry continues to make an underwriting loss: for every £100 taken in premiums, more than £105 is paid in claims.
“Insurers are particularly concerned about increasing legal costs and personal injury claims, which last year rose by 22%.”
The average car accident claim for a young male driver is nearly £4,500, compared with £2,700 for their female peers. For drivers aged over 30, the average claim is £1,400 for men and £1,200 for women.
Douglas added that the latest casualty figures from the Department for Transport showed that the number of people killed or seriously injured on Britain’s roads continued to fall.
“But, sadly, young drivers are taking an increasing share of that toll,” he said. “It is believed that 17% of drivers are aged under 25, yet they account for nearly a third (29.1%) of casualties. The insurance premiums they pay reflect that.
“I believe that, despite the competitiveness of the car insurance market, all these factors mean premiums will continue to rise.”