Regionally, customers in Manchester and Merseyside received the largest quarterly increase after one of the lowest levels of increases in the first quarter. At postcode level, the biggest quarterly comprehensive increases were seen in Bradford, East London and Ilford - all in excess of 20%.
(PRWEB) July 21, 2010
Motor insurance prices ballooned in the second quarter of 2010, the latest edition of the Confused.com/EMB Car Insurance Price Index (CIPI) has found.
The average cost of comprehensive cover rose by 14.2%* between April and June, vastly outstripping the previous rises of 4.3% and 6.3% in the two previous quarters.
These latest figures reveal that prices for comprehensive cover have gone up a massive 31% in the last 12 months, bringing the average comprehensive premium up to £599.
41-55 year old drivers bore the heaviest brunt of the quarterly increases for comprehensive cover, reflecting a generation of parents allowing their children onto their policy. Women suffered the worst from this with drivers of this age group facing a 14% penalty for having named drivers other than their husband.
Simon Lamble, product director at Confused.com said: "This is a massive blow for motorists who have already suffered at the hands of petrol price hikes and insurance premium tax increases, and unfortunately we do not think we've seen the worst of it. In the last two years visibility of the market through price comparison sites has kept prices down and driven up competition. In order to secure customers insurers have been forced to repeatedly slash their margins, but inevitably this could not continue.
"Zurich publicly announced in January it was looking to raise prices by up to 20% and it appears the rest of the industry has followed suit in a bid to get back to profit. Increasing claims costs, more injury payouts and fraud have created a situation where providers are not making any money."
EMB Partner, Peter Lee said: "The dramatic increases seen in the quarter, including a month-to-month rise of over 6% in April alone for comprehensive cover, come off the back of the reporting of some pretty horrendous 2009 results. Insurers' 2009 Financial Services Authority returns showed that the average private car insurer incurred costs of £122 for every £100 of premium received."
Simon Lamble continued: "The insurance industry had to pay out £400 million to the Motor Insurance Bureau in 2009 to cover incidents involving uninsured drivers, which translated into £30 on every honest driver's insurance policy. With insurance costs rising and household budgets being squeezed, consumers are more likely to consider gambling rather than fork out for cover they hope they will never have to call into action. It is important to remember that no matter how safe a driver you are, you cannot rely on the same from other people. Only three in five people think they'll be caught but the harsh truth of the matter is that every three minutes someone is convicted for uninsured driving and the fine and points do not tell the full story of the damage."
"Unfortunately it seems that the already-squeezed average driver will suffer the most, with our index showing that the cars targeted for the steepest rises were family favourites such as 5 door hatchbacks, whilst prestige vehicles fared better."
Peter Lee added: "Regionally, customers in Manchester and Merseyside received the largest quarterly increase after one of the lowest levels of increases in the first quarter. At postcode level, the biggest quarterly comprehensive increases were seen in Bradford, East London and Ilford - all in excess of 20%."
For further information please contact:
Press Office, Confused.com 02920 434 398
Graham Whitehead, EMB 01372 751060 / 07827 953969
Notes to editors
*The index comprises the cheapest quote received for comprehensive and TPFT cover.
Confused.com is one of the UK's biggest and most popular price comparison services. Launched in 2002, it generates over two million quotes per month. It has expanded its range of comparison products over the last couple of years to include home insurance, travel insurance, pet insurance, van insurance, motorbike insurance, breakdown cover and energy, as well as financial services products including credit cards, loans, mortgages and life insurance.
Confused.com has a panel of 90 motor insurance providers and January - June 10% of customers saved over £188
Confused.com is not a supplier, insurance company or broker. It provides a free, 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.
EMB is an award-winning international actuarial and business consultancy and software provider.
Best known as an advisor to non-life insurers, an area in which it works with 28 of the top 30 companies in the world, it also has developed its core analytical and predictive modelling capabilities to move into other business sectors and functions, such as banking and asset management, fraud prevention and marketing.
EMB employs more than 300 people around the globe and staff numbers have more than doubled in the past five years.