Motor insurance premiums climb for second straight quarter
Motor insurance premiums rose for the second quarter in a row, according to the Defaqto Market Pricing Motor Insurance Price Index.
It found premiums increased by 2.1% from April to June, building on a 1.4% rise in the first quarter of the year.
Premiums rose 1.8% in April and 0.6% in May, before falling by 0.2% in June.
Average quotes have now gone up 3.6% so far this year but remain 0.8% lower than they were a year ago and 17.1% below levels seen two years ago.
Harder pricing
Stephen Kennedy, director at Defaqto, said: “Quarter two confirms that the motor insurance market has moved into a harder pricing phase, but this is not a repeat of the extreme inflationary cycle we saw in 2022 and 2023. Prices have risen for two consecutive quarters, and the year-on-year gap has narrowed very quickly, but the June movement suggests the market may now be finding a more stable footing.
“What is important is the direction of travel. That indicates that the sustained reductions of the last two years have come to an end. Insurers are again applying upward pressure where they need to, particularly as they seek to protect margin and respond to underlying cost dynamics.”
