A new survey has shown that in the third quarter of 2012, comprehensive car insurance premiums fell at a record rate. Car insurance price index from confused.com and Towers Watson recorded an average fall in rates of 5.1% between July and September – the steepest reduction since research started in 2007.
As a result of this, rates have dipped by 10.3% in the last 12 months. At the end of September, the average comprehensive premium in the UK stood at £757 – a drop of £87 in the last year. In addition, for the first time since 2007, the annual price movements for 3rd party, fire and theft cover also became negative, falling by an average of 2.1% (24%) over the last 12 months.
The largest portion of price reductions was accounted for by young drivers – specifically females. Comprehensive rates for all 17–20 year olds have fallen by 13.6% in the past year. Females in this age group having seen average decreases of 17.3%. This was significantly aided by a 9.1% drop in the third quarter.
Duncan Anderson, Towers Watson’s global pricing and product management leader states that price decreases of this order signify jostling for position amongst insurers due to the implementation of EU gender ruling from 21st December 2012.
Having won more ‘young driver’ business, they will seek to retain profitable segments by substituting other factors for gender and minimising the impact of the future price rises that are anticipated to affect many women in 2013.
Shockingly, almost half of drivers would still lend their car to a friend, knowing they’re not insured. When this happens, both parties are committing the offense and could land themselves a fine of up to £5,000 and up to 8 points on your license, or in severe cases, even a full ban.
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