(Reuters) – The cost of a comprehensive car insurance policy in Britain touched an 18-month high in the first quarter and will continue to increase on the back of rising inflation and regulatory changes, a survey showed on Thursday.
UK motorists now have to pay about 550 pounds ($718.08) for a comprehensive car insurance premium, according to the latest index from price comparison site Confused.com in association with insurance broker Willis Towers Watson.
Car insurance premiums had fallen for a year till the autumn of 2021 as lockdowns kept motorists off the roads and competition in the UK car insurance industry intensified.
“As people return to more normal patterns of work and life, we are seeing those reductions in premiums gradually unwind,” said Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW.
Rourke also expects premiums to continue rising through 2022 as Britain battles high inflation and insurers face new rules by the Financial Conduct Authority that ensure consumers renewing policies are not charged more than new customers.
Britain’s annual inflation rate climbed to 7% in March, its highest since 1992.
“Prices could continue to increase simply because insurers are likely to be facing more claims than last year, as people start to drive more frequently, and this just means insurers will have to be as competitive as possible,” said Louise O’Shea, CEO at Confused.com.
“And in turn consumers will need to continue to shop around, as the assumption that renewal prices won’t increase clearly isn’t true.”
Eighteen-year-old drivers continue to pay the most of any demographic, taking their average premiums to 1,419 pounds, the survey showed.
($1 = 0.7659 pounds)
(Reporting by Sinchita Mitra in Bengaluru; Editing by Devika Syamnath)