Comprehensive car insurance premiums in the United Kingdom have continued their downward trend, falling by 16% (£136) over the past year, according to the latest data from the Confused.com Car Insurance Price Index, produced in partnership with WTW. This brings the average annual premium to £735, marking a significant decline from previous years.
The report highlights that since reaching a peak of £995 in December 2023, average premiums have dropped by £260, or 26%. This is the seventh consecutive quarter in which prices have fallen, with the most recent quarter showing a further 3% (£22) decrease. These figures suggest that the UK motor insurance market is stabilising after a period of sharp adjustments.
The General Insurance Price Index from Pearson Ham Group also points to signs of stability within the market. Analysts expect future trends to be shaped by factors such as claims severity, repair costs, and competition among insurers for new business. The market is anticipated to enter a steadier phase as these elements play out.
Young Drivers See Mixed Results as Premiums Shift
While overall premiums are falling, not all drivers are benefiting equally. Confused.com’s index reveals that drivers under 25 have seen an average annual reduction of 17% in their premiums. Within this group, 17-year-olds experienced the largest drop, with premiums falling by 28% (£780) to £2,008. Eighteen-year-olds saw a 20% decrease, bringing their average premium to £2,342.
Drivers over 40 also experienced relief, with premiums dropping by 15% on average. For those aged 52, premiums declined by 13% (£86), resulting in an average annual cost of £585.
However, recent data from Consumer Intelligence show that younger drivers did not see continued benefits in the last quarter. While UK car insurance premiums overall fell by 10.5% over the past year, premiums for drivers under 25 actually rose by 3% in the most recent quarter. This reversal is largely due to less interest from telematics providers—companies that use technology to track driving habits—in offering competitive rates to younger drivers. As a result, those aged 17 to 19 are seeing fewer price cuts from insurers.
Steve Dukes, CEO at Confused.com, noted that despite recent declines, car insurance prices remain 25% higher than three years ago. “It’s important that, as an industry, we don’t lose focus on the underlying factors which are pushing premiums higher than they have been historically. There’s still a significant opportunity to work together to deliver further value to customers,” Dukes said.
Industry experts believe that ongoing collaboration and attention to key cost drivers will be essential for keeping premiums affordable and ensuring a stable market for both insurers and policyholders.
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