Insurers miss out on £1.1 billion savings
By Kyle Linsay
Thursday, July 30, 2015 - 09:15
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 quarter, according to figures released today by the Association of British Insurers (ABI). The ABI’s Quarterly Average Private Comprehensive Motor Insurance Premium Tracker shows an average premium of £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 (£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 £1.1billion of savings onto motorists.
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’s 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.
“UK drivers benefit from one of the most competitive motor insurance markets in the world. But with pressure on claims costs and an increase in insurance premium tax adding an additional £12.80 to the cost of the average policy from November, other factors are starting to put up costs. This makes action against Claims Management Companies and tackling whiplash claims a key priority.”