Motor premium stable despite cost pressures

The average price paid for motor insurance remained flat in Q3 2019, as drivers continued to benefit from a competitive market, despite increasing cost pressures on insurers. This is according to the latest Motor Insurance Premium Tracker the Association of British Insurers has published today.

The ABI said that it is the only survey that focuses on the price consumers pay for their cover, rather than the price they are quoted.

The average premium paid for motor insurance was £468 in Q3, almost similar to that of Q2, a £1 decrease. A year ago, the average price paid by consumers was £3 higher.

The ABI listed a series of factors which it said add pressure to the cost of premiums: the change to the Ogden rate in July; more expensive vehicle repairs, which reached £2.3bn in H1 2019, an 11% rise compared with the same period last year; the cost of theft, up by 18% on the same period last year to £211 million, reflecting a trend occurring over the past five years.

Assistant-director of the ABI, head of general insurance policy, Mark Shepherd said: “Motorists continue to get competitively priced motor insurance deals, but cost pressures remain. This makes it more important than ever that the whiplash reforms in the Civil Liability Act are implemented on time and in full.”

Shepherd also reminded the ABI's call for a reduction of the rate of the insurance premium tax.

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