The latest Insurance Price Index from the British Insurance Brokers’ Association (BIBA) and Acturis that tracks £5billion of actual premiums paid annually via insurance brokers shows a significant rise in the level of premiums charged for private car policies.
In the final quarter of 2015 annual premiums for car insurance rose by 8.6% compared to premiums paid in the same period of 2014. The bad news worsens for motorists if you take into account that a 58% increase in Insurance Premium Tax (IPT) came into effect on 1 November 2015 and so drives the actual cost of motor policies up by over 12%.
Steve White, CEO at BIBA said: “BIBA has said many times that IPT is a tax on protection and affects the affordability of insurance. The motor insurance industry has worked hard to tackle fraud to help minimise rises in premiums so it is particularly worrying to see such a significant increase fuelled further by the IPT rise especially in a period when we are seeing the number of uninsured drivers rising.”
The Insurance Price Index also examines premium developments of three typical ‘insurance baskets’ for ‘Larger Commercial’, ‘SME’ and ‘Individual’ tracking percentage changes in premium for these groups of buyers.
Theo Duchen, Co-CEO of the Acturis Group added: “The individual insurance basket which tracks private car and personal household premiums has shown decreases in annual average premiums since the end of 2012, but the latest figures confirm that they are now levelling off and indeed comparatively grew in quarter 4 2015 compared to the same quarter last year.”
Steve White concluded; “BIBA’s 2016 Manifesto calls for ‘fairness for all’ including fairer premiums for customers, who all find themselves paying for fraud and uninsured driving, and we are committing to working with other industry stakeholders to reduce both.”