The average annual price paid for motor insurance increased by £5 in the second quarter of this year, according to an industry body.
The Association of British Insurers (ABI) said the typical price for private motor insurance has increased to £419 – and insurers are finding it increasingly challenging to absorb rising cost pressures.
The latest figure is still £11 lower than in the same quarter in 2021.
The average premium paid for a new policy in the second quarter was £129 higher than for a renewed policy.
While, like many other sectors, motor insurers are facing higher cost pressures of their own, which are becoming increasingly challenging to absorb, they will continue to do all they can to keep motor insurance as competitively priced as possible— Callum Tanner, ABI
Average premiums for new policies stood at £500 and average premiums for renewed policies increased were put at £371.
An insurance pricing shake-up took place at the start of 2022 which means insurers’ renewal quotes for home and motor insurance consumers should not be more expensive than they would be for new customers.
As motor insurers have been implementing the Financial Conduct Authority (FCA) pricing rule changes, they have continued to deal with rising costs and supply chain issues, including the continued global shortage of semiconductors, rising prices for used cars and more expensive repairs, the ABI said.
Delays in getting some spare parts are in some cases increasing vehicle repair times, it added.
Callum Tanner, the ABI’s manager, general insurance, said: “Insurers appreciate that these are difficult times for many households dealing with the rising cost of living.
“While, like many other sectors, motor insurers are facing higher cost pressures of their own, which are becoming increasingly challenging to absorb, they will continue to do all they can to keep motor insurance as competitively priced as possible.”
