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Car insurance price index reveals a dramatic drop of 24% since peak in Q2 2011

- In contrast yr-on-yr increases for female drivers aged 17-20 -

  • A price drop of £206 since insurance price peak in Q2 2011
  • Average cost of comprehensive car insurance - £652,decrease of 13.9% yr-on-yr
  • 17-20 yr old females see a yr-on-yr increase of 9.1% on the cost of comprehensive car insurance
  • Car insurance premiums fell 29.2% for males aged 17-20
  • Average price difference between men and women is now only £30

The latest Confused.com Car Insurance Price Index, in association with Towers Watson reveals that comprehensive car insurance prices have fallen by a dramatic 24% since prices peaked in Q2 2011.

The average comprehensive car insurance price now stands at £652 as of Q3 2013, compared with £858 when prices were at an all-time high in Q2 2011. This considerable price decrease of £206 is welcome news for motorists.

Premiums have continuously dropped over recent years, with motorists enjoying a yr-on-yr decrease of £105 (13.9%) on their comprehensive car insurance premiums (Q3 2012, £757 v £652, Q3 2013).

For third party fire and theft cover only, average premiums for Q3 2013 stood at £1,057, showing a decrease of 6.5% yr-on-yr. This is also a 4.6% reduction quarter on quarter for car insurance prices.

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Despite rising inflation costs over the last two years, British motorists have been thrown a lifeline in the form of falling car insurance premiums. Since June 2011, inflation has risen by more than 6%, whereas comprehensive car insurance premiums have bucked this trend by falling 24%.

September 2013 has seen a peak in inflation rates. Yet by contrast the same month has seen average car insurance premiums hit a three-year low of £616 (lowest car insurance premiums were recorded in Q2 2008 - £499).

Although average car insurance premiums have been dropping, the latest Confused.com Car Insurance Price Index, in association with Towers Watson paints a very different picture for young female drivers, who have been hit the hardest when it comes to the cost of car insurance. The average quoted comprehensive premiums for 17-20 year old women rose by a massive 9.1% across the UK over the last 12 months.

As a result car insurance premiums for females of this age group now stand at a staggering £1,862. In stark contrast, quoted prices for 17-20 year old men have plummeted by an average of 29.2% over the same period. Male motorists of this age group have seen their car insurance costs fall significantly by an average of £969, decreasing from £3,314 (Q3 2012) to £2,345 (Q3 2013).

Young female motorists have traditionally enjoyed much lower car insurance premiums than their male counterparts, due to the fact that men are statistically more likely to have an accident. However, under the EU Gender Directive which took effect on December 21st 2012, insurers are no longer able to use gender as a factor when pricing insurance.

Despite being subject to hikes in car insurance premiums at the start of this year, women still enjoy lower prices overall than men, though the gap between genders does appear to be closing. 

The gender divide in more depth…

In Q3 2013 men paid £665 on average for their comprehensive car insurance premium, a reduction of 17.5% compared to the same time last year. Women enjoyed a less steep drop in premiums, paying £635 on average, an 8.6% decrease over the same period – again a potential effect of the Gender Directive.

As a result of these price changes, the difference between men and women’s car insurance premiums on average now stands at just £30. This is a huge contrast to price differences seen this time last year, when men were paying £112 more than their female counterparts on average for their car insurance (£807 compared to £695).

However, a larger price gulf remains amongst the younger age group, which currently sees 17-20 year old males pay £2,345 on average for their comprehensive car insurance premiums, with females of the same age paying £1,862 – a price difference of £483.

This price gap has reduced dramatically over the years, with the biggest difference seen in Q1 2011 when men aged 17-20 paid £1,787 more on average for their car insurance than women (£3,798 compared to £2,011).

Despite prices plummeting, 17-20 year old male drivers in the UK are still being quoted average comprehensive car insurance premiums of £2,345, paying more than three times the average insurance premium (£652).

The regional divide

When looking at the regional divide, the Confused.com Car Insurance Price Index, in association with Towers Watson reveals that all areas in the UK are seeing a significant decrease yr-on-yr. The biggest yr-on-yr decreases in insurance premiums in Q3, 2013 can be seen in Scotland, Manchester/Merseyside and the south east.

 Top 10 regional comprehensive insurance decreases year-on-year

          Region       

       Yr-on-Yr change 

Central Scotland       

                16.3%

Scotland- East & NE

                16.2%

Scottish borders

                15.9%

Manchester/ Merseyside

                15.9%

South east

                15.5%

Leeds/ Sheffield

                15.1%

South

                14.8%

Scottish Highlands

                14.6%

North 

                14.4%

East Midlands

                14.1%


Regionally, the most expensive comprehensive car insurance premium label falls to Inner London, where the average cost stands at £1,083 - £431 more than the national average. This is closely followed by premium prices in Manchester/ Merseyside, outer London and the west Midlands where motorists can expect to pay in excess of £800 on average. 

5 most expensive regions for comprehensive car insurance

         Region      

 Average cost of    
car insurance 

Inner London

£1,083

Manchester/ Merseyside   

£925

Outer London

£837

West Midlands

£814

Leeds/ Sheffield

£763


On average car insurance premiums have fallen by 3.9% qtr-on-qtr for the UK as a whole. However, one area bucking this trend is west London, where the average remained at £950.

However in contrast, the greatest decrease in the last three months was in London west-central (10.2%).

Winners and losers

The latest Confused.com Car Insurance Price Index, in association with Towers Watson, Q3 2013, also shows that it’s a varied picture for British motorists up and down the country, based on their age, gender and location.

Winners:

- Motorists aged 40 to 60  have experienced yr-on-yr  decreases in excess of 15% on the cost of their   comprehensive car insurance

- In Scotland, 17-20 year old men now pay less than they did at the start of 2007

Losers:

- Regions where price hikes have hit young women drivers significantly include Northern Ireland, where these young women have been impacted by rises of 14.8%, bringing their cost of car insurance to £2,156.

- 13.6% price hikes in central & north Wales, for young female drivers aged 17-20, where these drivers are paying £1,519 for their comprehensive car insurance.

- In the south west, 17-20 yr old females are now paying on average £1,394 after facing a price hike of 12.1%.

Gemma Stanbury, Head of Car Insurance at Confused.com says:

"In the last three months we’ve seen a significant reduction in car insurance prices across the board, seeing premiums drop by an average of 13.9% year-on-year. It’s great news for most motorists as their average premium is now £191 cheaper than it was two years ago.

“Falling car insurance premiums are welcome news for motorists who may well be feeling the pinch as a result of rising rates of inflation. We would recommend that motorists take advantage of these latest price drops, not just accept their renewal price.

“However, this good news isn’t felt by all as the most recent results from the Confused.com Car Insurance Index reveal that women have experienced the greatest increases to their car insurance premiums. As a result, women aged 17-20 are now facing average prices of £1,862 for their car insurance.  At the opposite end of the spectrum, their male counterparts are enjoying huge price decreases of 29.2% as the industry attempts to level out car insurance prices.”

-ENDS-

Previous press releases:

2013

Car insurance index reveals dramatic drop in prices across the market year-on-year 

Young female drivers hardest hit by EU gender directive

2012

Married females were quids in on their car insurance premiums in Q4 2012

Car insurance prices plummet by 13.6% for drivers under twenty

Car insurance prices dip by 7.1% year on year

Young driver insurance can cost more than 18 percent of annual salary

 

Notes to Editors:

More than 4 million quotes are used in the construction of each quarter’s insurance price index - this makes it the most comprehensive insurance index in the UK. Unless otherwise stated all prices referred to are for comprehensive cover.

* The CPI figures were taken from the ONS website (http://www.ons.gov.uk/ons/datasets-and-tables/data-selector.html?cdid=EL2R&dataset=mm23&table-id=1.3) which details the monthly effect (rather than the year-on-year changes that are usually publicised). 

The CIPI figures are from page 3 of the Confused.com Car Insurance Price Index.

The following web pages will be updated to reflect the new figures and can be linked to:
http://www.confused.com/car-insurance/price-index

Media information:
Confused.com press office: 
Email sarah.wenham@confused.com or 07788310289
         Laura.buchan@confused.com or 02920 434238

For further information:
www.confused.com/car-insurance/price-index

About Confused.com:

Confused.com was the UK's first price comparison site for car insurance. Confused.com is one of the UK’s biggest and most popular price comparison services. Launched in 2002, it generates over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include home insurance, holiday insurance, pet insurance, small van insurance, motorcycle  insurance, breakdown cover and gas and electricity, as well as financial services products including credit cards, loans, mortgages and life insurance. 

Confused.com is not a supplier, insurance company or broker. It provides an , objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com’s service is based on the most up-to-date information provided by UK suppliers and industry regulators.

Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the FSA.

About the Index:
The index is compiled using anonymous data from all enquiries submitted on Confused.com. In line with the draft Office of Fair Trading (OFT) commitments on the use of competitor price data, the prices used for calculating the index are based on an average of the best five quotes received on Confused.com.
 
About Towers Watson:
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organisations improve performance through effective people, risk and financial management. The company offers solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at www.towerswatson.com.


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