ABI: Motor cover prices crash to lowest level

The Association of British Insurers (ABI) has tracked the average price paid by motorists for their motor insurance in the first quarter of 2022 crashing by five percent to its lowest level in nearly seven years.

The drop will have given some much-needed relief to many households facing rising energy and food bills, with inflation currently at its highest rate for 30 years, according to ABI’s Motor Insurance Premium Tracker.

The ABI’s Tracker is the only survey that looks at the price consumers pay for their cover, rather than the price they are quoted.

The latest Tracker shows that in the first quarter of 2022, the average price paid for comprehensive motor insurance was GBP416. This was a five percent drop over the year since quarter one of 2021. The current average premium is now at its lowest level since quarter 3, 2015, the report stated.

While it is too early to assess the impact of the Financial Conduct Authority’s changes to the rules on pricing of motor and home insurance introduced on 1 January 2022, first indications show an increase in the difference between new and renewed average premiums paid. The average premium paid for a new policy in the first quarter was GBP105 higher than for renewals

James Dalton, the ABI’s Director, General Insurance Policy, said: “Like other sectors, motor insurers face rising costs. While it is going to be extremely challenging for these to be absorbed, insurers are doing all they can to keep prices as competitive as possible as millions of household cope with the cost of living crisis.”

“As the FCA has said, the impact of their reforms to pricing rules introduced on 1 January this year could lead to some consumers paying higher prices if they used to benefit from significant new business discounts. For some it could still pay to shop around for the policy that best meets their needs”.