Following the ABI’s release of its Motor Insurance Premiums data report for Q1 2019;
Yasha Kuruvilla, General Insurance Associate Analyst at GlobalData, a leading data and analytics company, offers his views on the fall in motor premiums in Q1 2019:
“ABI data shows that motor premiums have fallen by £15 quarter on quarter representing the largest fall in premiums since Q1 2013.
“The decrease in premiums is likely linked to The Civil Liabilities Act, which is aimed at reducing the cost of claims associated with bodily injury, in particular whiplash. However it is too soon to quantify the full magnitude of its impact, given that numerous other factors contribute towards premiums. Yet, it is encouraging to see the savings insurers promised to pass onto consumers, once the act came into force, materializing.
“But drivers should be cautious of getting their hopes up, as motor premiums have the potential to rise especially due to the increased prevalence of keyless car theft in recent months, which according to the ABI, increased 12% year on year in 2018. The cost of these claims also saw quite a substantial increase, rising by 29% over the same period, threatening to put upward pressure on premiums. Combining the increase in car theft with the volatile British Pound – which has the potential to drive up repair costs as parts are often imported – motorists should be cautious to rejoice too soon.
“Hopefully the increasing cost of claims does not outweigh the positive benefits being generated by The Civil Liabilities Act, and policyholders will continue to enjoy lower premiums throughout 2019.”