20th Jan 2015 06:33
LONDON (Alliance News) - UK car insurance premiums rose at a slower rate over the final three months of last year than in the previous quarter, though further increases are expected as insurers continue to raise premiums.
The AA British Insurance Premium Index's average 'shoparound' quote for an annual comprehensive car insurance policy increased to GBP540.26 in the fourth quarter of 2014, up 0.2% from the third quarter.
That compares with a quarter-on-quarter rise of 1.2% in the third quarter, which was the first increase in three years, though premiums are 10% cheaper than this time last year.
Despite the slower rate of increase, Janet Connor, managing director of AA Insurance, said she expects insurers to continue to push for premium increases.
"Some insurers may have lost business by increasing premiums, leading to a 'year-end sale' to boost market share, so car insurance is still very good value," Connor said in a statement. "Car insurance is extremely competitive. Nevertheless the underlying trend is upward, although I think premiums will struggle to rise past 10% by the end of the year."
Connor said that competition has been the bigger driver in falling premiums in the past two years than reforms designed by the UK government to cut fraudulent and exaggerated personal injury claims. She said this means that current car insurance premiums are unsustainable.
"The facts speak for themselves. The number of personal injury claims is now higher than before the Justice Ministry reforms were introduced," Connor said.
Over the 12 months ended March 2014, the average number of claims was 66,000 per month, while they now stand at an average of nearly 71,000 per month.
Connor also welcomed the second phase of the government's whiplash reform programme, which focuses on the quality of the medical evidence produced in support of whiplash claims.
Separate figures from the AA showed that home insurance premiums were "static" on a quarterly basis, with the average price of a combined policy for buildings and contents rising marginally to GBP163.06 in the fourth quarter of last year from GBP163.01 in the third quarter.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
AdmiralDirect LineEsure Group