The UK’s automotive industry continuously reports increasing prices in insurance premiums amid ongoing cost pressures and labor shortages, Insurtech Amsterdam reports, citing the recent Confused.com Car Insurance Price Index in association with broker WTW.
“Drivers are seeing their car insurance premiums soar by as much as 90 per cent as insurers battle a dramatic increase in claims costs, pushed higher by rising repair costs and labour shortages. As poor economic conditions bite, we are seeing claims in vehicle theft increasing alongside a rise in fraudulent claims also to blame.”
Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW
Average EV insurance premium price
UK-based drivers are now paying an insurance premium of £924. It indicates a 58% increase or £338 addition from more than a year ago when the price was only £586, according to the Insurance Price Index.
“Car insurance premiums are at their highest ever recorded levels since the WTW/Confused.com Car Insurance Price Index was launched in 2006. The previous peak was in the second quarter of 2023 when the average premium was £776. At 58%, the annual rise in motor insurance costs continues to far outstrip CPI inflation, at 6.3% in August.”
WTW
In addition, car insurance prices have also reported consecutive surges for eight quarters after they increased by 19% (£148) in Q3 2023.
According to data gathered from more than six million customer quotes per quarter, this marks the highest quarterly increase in history. In hindsight, the previous fastest growth record was set in Q2 2023 at 18%.
Presented below are the quarterly price trends in car insurance:
| 2022 Q3 | 2023 Q3 | |
| Average Premium* | £586 | £924 |
| % Change in Quarter* | +6% | +19% |
| £ Change in Quarter* | +£32 | +£148 |
| % Change Annually* | +14% | +58% |
| £ Change Annually* | +£72 | +£338 |
Most expensive car insurance per region
Inner London is currently the most expensive region in the UK at £1503 in the third quarter of 2023, up from just
£936 in the same period last year.
Outer London followed with a car insurance price of £1187. The third most expensive region in the country was Manchester / Merseyside for £1154 car insurance pricing on average.
Refer to the table below:
| 2022 Q3 | 2023 Q3 | |
| Inner London | £936 | £1503 |
| Outer London | £741 | £1187 |
| Manchester / Merseyside | £737 | £1154 |
| West Midlands | £697 | £1139 |
| Leeds / Sheffield | £669 | £1053 |
Which age group is most affected?
The index also revealed that drivers aged 17 to 20 were the most affected compared to any age group. Meanwhile, those 18-year-old drivers saw the sharpest annual increase as insurance prices surged 89% YoY to £1414. They are now paying £2995 on average.
It also showed that premium price growth slowed through Q3 2023, with the following monthly increases:
- July: 7.5%
- August: 6.6%
- September: 4.1%
“The latest monthly data suggests that the cycle of this challenging market may now be peaking, signalling some relief for drivers in 2024. If inflation continues to slow next year, with the cost of second-hand cars and repairs stabilising, this may feed through to less price pressure.”
Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW
UK-based insurers must work harder to maintain car insurance premium prices at affordable rates to avoid discouraging customers from joining the shift to electric vehicles and overcome the industry’s ongoing cost pressures and labor shortages.
