30th July 2015
The average price paid by motorists for an annual comprehensive motor insurance policy rose by 2.1% in the second quarter of 2015 compared with the previous three months, according to the Association of British Insurers (ABI).
The trade body’s research showed that the average premium was £367 for the three months of April, May and June, up from £359.
The year-on-year increase compared with the second quarter of 2014, when the average premium was £356, is 2.9%.
Average premiums remain lower than they were in the second quarter of 2013, at £377, when the government introduced reforms to the civil justice system including a reduction in fixed legal fees for personal injury claims.
Since those reforms were introduced, insurers have passed £1.1bn of savings onto motorists claims the ABI.
Data from the Claims Portal shows the number of personal injury claims related to road accidents was 12% higher for the year ending April 2015 compared with the previous 12 months.
Rob Cummings, the ABI’s Manager for General Insurance, said: “Motorists have seen a solid two years of lower insurance premiums as a result of market trends and in the wake of the Government’s reforms to tackle frivolous personal injury claims, and over a billion pounds’ worth of savings have been passed on to customers.
“With pressure on premiums increasing however, it is important the Government continues its work to tackle the compensation culture and attack the high cost and number of whiplash claims. With this in mind, we welcome the Government’s announcement of a review of the activities of Claims Management Companies in the last Budget.”
Cummings asserted that while UK drivers benefit from one of the most competitive motor insurance markets in the world, the pressure on claims costs and an increase in insurance premium tax is adding an additional £12.80 to the cost of the average policy from November.
“This makes action against Claims Management Companies and tackling whiplash claims a key priority,” he said.