Car insurance premiums fall in third quarter

The pandemic is the main factor driving down prices, a survey from Willis Towers Watson has found.

Comprehensive car insurance premiums have fallen by 1% (£5) in Q3 of 2020 due to the pandemic, according to the latest’s Car Insurance Price Index in association with Willis Towers Watson (WTW).

The findings are based on price data compiled from almost 6m customer quotes per quarter.

Prices have dropped to £765 over the last three months with drivers paying £50 less than they were at the start of the year, it found.

This makes it three consecutive quarters since the average cost of car insurance has fallen.

It follows an £18 (2%) increase in the past year.

Graham Wright, UK lead of P&C personal lines pricing at WTW, said:

“The further fall in premiums during the last quarter is perhaps unsurprising as motor insurers reflected on a relatively positive experience for the year to date. But with further Covid-19 restrictions being introduced and a market response to the FCA’s recently released pricing practices report still to be factored in, uncertainty in premium levels continues.”

Biggest challenges Wright added:

“One of the biggest challenges for insurers and intermediaries alike will be managing the transition to new world pricing given current market competitive pressures, and therefore deciding how and at what point price changes should be made. It certainly remains one of the most demanding times for insurance pricing.”

Aged 17 drivers benefited from the biggest price fall with a 7% (£140) quarterly price decrease and their annual premiums down to £1,911.

Meanwhile, drivers aged 33 experienced the biggest increase of 2% (£13), increasing annual premiums to £705.

Break down 

  • Drivers in the Scottish Borders saw a big quarterly drop in prices and insurance premiums decreased on by 5% (£30) to £554.

  • Locally towns in Scotland saw the greatest quarterly drop in prices, which was led by Galashiels where premiums fell by 7% (£42) with drivers paying £542 in the last three months.

  • This was followed by Glasgow and Motherwell – both saw a 5% decrease in premiums.

  • However inner London was the only region in the UK to buck the downward trend in prices. Comprehensive car insurance for them increased by 3% (£32).