Insurers should be doing more to help consumers during difficult times, says chief executive
Comprehensive car insurance premiums have surged by 19% during the last 12 months with UK motorists now forking out £629 on average, according to a joint index published today (25 January 2023) by WTW and Confused.com.
This equates to £100 year-on-year increase for UK motorists, including a £43 rise during the final quarter of 2022.
The Car Insurance Price Index has highlighted that motor premiums have now risen for five straight quarters since the last three months of 2021, recording a price increase of 7% (£43) in the last quarter of 2022.
The index has been running for decade and is made up of price data from more than six million quotes per quarter.
Tim Rourke, UK head of property and casualty pricing, product, claims and underwriting at WTW, said: “The last 12 months have been characterised by persistently high inflation and insurers adjusting to the new FCA pricing rules while maintaining margins.
“With supply chain disruption, labour shortages, lack of raw materials and increasing food, fuel and energy prices set to continue, the upward pressure on premiums, primarily driven by claims inflation, is set to continue well into 2023.”
The index also revealed that male drivers aged 71 and above saw the greatest percentage increase of 24% (£88) during the last 12 months, taking their premiums to £456.
Meanwhile, after a 19% annual shift in prices (£277), male drivers aged between 17 and 20 now pay an average premium of £1,764, which is the most of any demographic and £449 higher than the next highest age group.
On the flipside, female drivers aged between 66 and 70 continue to benefit from the lowest annual premium at £309.
Louise O’Shea, Confused.com’s chief executive, added: “The news around the latest price increases isn’t what we want to be sharing with consumers in the current financial climate.
”Following the FCA pricing changes 12 months ago, we expected prices to increase, but perhaps not quite at this rate.
“Despite renewal pricing regulations, it’s clear that insurers should be doing more to help consumers during difficult times.
“Auto-renewal isn’t getting any easier to navigate. In many cases, and for too long, insurers have designed journeys to keep consumers locked in to existing policies, frustrating their desire to shop and switch.
”With this in mind, the FCA’s introduction of its new Consumer Duty, which sets higher and clearer standards of consumer protection across financial services, will require firms to put their customers’ needs first. This should make it as easy for consumers to cancel their insurance policy as much as it is to buy it.”