Soaring premiums to continue rising

Car insurance premiums saw the biggest annual rise in six years in 2022.

According to the Confused.com Car Insurance Price Index in association with WTW, average comprehensive premiums rose by 19% last year to an average price of £629.

The sharp rise was capped by a seven per cent increase in the last three months of the year.

All regions in the UK saw double digit rises, with male drivers aged over 71 enduring the greatest price hikes of 24%. However, their average policies are still just £456 compared to the £1,764 that male drivers aged between 17 and 20 must now pay.

Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said: “The last 12 months have been characterised by persistently high inflation and insurers adjusting to the new FCA pricing rules while maintaining margins. With supply chain disruption, labour shortages, lack of raw materials and increasing food, fuel and energy prices set to continue, the upward pressure on premiums, primarily driven by claims inflation, is set to continue well into 2023.”

Louise O’Shea, CEO at Confused.com, added: “The news around the latest price increases isn’t what we want to be sharing with consumers in the current financial climate. Following the FCA pricing changes 12 months ago, we expected prices to increase, but perhaps not quite at this rate.

“Despite renewal pricing regulations, it’s clear that insurers should be doing more to help consumers during difficult times.

“With rising costs all around us and a real worry for millions right now, consumers need to be savvy with spending. Fortunately, the cost of car insurance is an area where savings can be made. Renewal prices won’t always be the best price out there, but the good news is that there are still lots of ways to save money.”