Motor insurance coverage premiums skyrocket with document 21.1% annual enhance

A “good storm” of the scarcity of latest and used vehicles plus the influence of inflation on automotive elements, repairs and servicing and motion by regulators to ban twin pricing has ramped up costs, Shopper Intelligence says.

The scarcity of vehicles has pushed up the price of changing automobiles concerned in claims whereas rising prices for elements, repairs and servicing has added to the pricing pressures.

The Monetary Conduct Authority’s Basic Insurance coverage Pricing Practices (GIPP) guidelines launched in January 2022 which banned insurers from providing totally different premiums to new and current clients have additionally had an influence.

“That is the most important yearly enhance we’ve seen since we began monitoring quoted premiums in October 2013 and over the last three months alone premiums have soared 6.7%. That’s the second largest quarterly enhance we’ve ever witnessed as effectively,” says Ian Hughes, CEO of Shopper Intelligence.

“It is a good storm for insurers. A 12 months on from the GIPP guidelines being launched which was supposed to trigger a dramatic shift in client behaviour has compounded with customers decreasing the extent of canopy they’re buying from their insurer to save cash throughout these determined instances,” he provides.

Drivers in London pay the very best quoted premiums at £1,419 whereas these within the South West the place quoted the bottom at £576. Costs are rising quickest within the East Midlands and London at 26.4% and 26.3% respectively whereas the North East noticed the bottom worth rises at 12.1%

The rise in quotes throughout the board is boosting demand for telematics merchandise which reward safer drivers with decrease premiums. They now make up a document 33% – the very best degree since Shopper Intelligence first began monitoring – of the most affordable insurance coverage quotes for a typical motorist and 72% of essentially the most aggressive offers for under-25s.

Lengthy-term view

Common total quotes have elevated 41% since October 2013 when Shopper Intelligence first began amassing information.

Nonetheless, prices are down 20.1% over the interval for the under-25s whereas they’ve elevated 80.4% for the over-50s and 54% for these aged between 25 and 49.

Age variations previously 12 months

The under-25s – who’re statistically extra prone to have an accident – have seen smaller wuoted costs will increase previously 12 months at 17.9% however they proceed to be quoted essentially the most for insurance coverage at £1,917.

Quoted worth rises for the over-50s and motorists aged between 25 and 49 had been just about the identical with premiums for the over-50s up 22.5% and 22.1% for the over-25s. Nonetheless, the over-50s pay common annual premiums of £462 in contrast with £700 for the over-25s.

Telematics

The variety of telematics merchandise that make up the 5 most cost-effective insurance coverage quotes for a typical motorist has continued to develop, hitting a document 33% – the very best degree since Shopper Intelligence started monitoring in 2013.

The expansion in telematics competitiveness has been pushed by telematics suppliers who’re more and more squeezing conventional insurers out of the competitors for the enterprise of under-25s who depend on telematics to get moderately priced automotive insurance coverage in the event that they drive sensibly.

Telematics insurance policies base premiums on the way you drive, with insurance coverage changing into cheaper for safer drivers. At present 72% of the 5 most cost-effective insurance coverage quotes for under-25s are from telematics suppliers in contrast with 25% for the 25 to 49 age group and simply 12% for the over-50s.

Regional variations

Drivers within the East Midlands and London are experiencing the quickest rises in motor premiums at 26.4% and 26.3% respectively however no areas escaped worth rises. The North East noticed the bottom enhance however annual payments are nonetheless 12.1% greater.

Londoners proceed to pay essentially the most for motor insurance coverage at £1,419 adopted by the North West at £1,248. The most affordable area for motor insurance coverage is the South West at £576.