The combined cost of home and motor insurance fell last year by 4.3%. Home insurance alone reduced by 4.1% and motor by 4.4% in 2014 compared to 2013. These reductions were driven by premiums reducing fastest during the first half of last year. The combined cost of both home and motor insurance fell 5.5% from Q1 2013 to Q1 2014 and 4.9% from Q2 2013 to Q2 2014.
The figures compare the actual premiums paid from the British Insurance Brokers’ Association (BIBA) and Acturis Insurance Price Index, launched last year, which covers nearly £5 billion of premium per annum. It shows that the premiums paid in its consumer insurance ‘shopping basket,’ which includes a home and motor policy, have seen a downward trend each quarter last year, compared to the same period in 2013.
Small and medium sized enterprises are also benefiting from reducing premiums. The SME basket of the index, which includes the cost of a commercial vehicle and a commercial package policy, has shown a reduction of around 2% in 2014 compared to 2013. This is largely driven by the reduction in commercial vehicle premiums which saw reductions in Q4 2014 of 6.3% compared to Q4 in 2013.
Average premiums have remained fairly flat for larger businesses in 2014 compared to 2013. Although within this basket there is evidence that liability premiums increased 3.4% in 2014 compared with 2013. In addition if you look further back, liability premiums have increased 6.8% since 2010 which could be connected to an increase in liability claims.
Graeme Trudgill, BIBA’s Executive Director, said: “We are delighted that the index shows real benefits to customers. The insurance industry is very competitive and has also committed to a number of initiatives to reduce insurance costs for families and businesses. Customers should see these reductions in their premiums and if in any doubt about the cost or coverage of their insurance, should speak to an insurance broker.”
Steve White, BIBA’s Chief Executive, said: “We are now a year on since we launched the index. The data has proven invaluable when speaking to the Government and other external stakeholders about the industry and the role that insurance brokers play within it.”
The index, although launched last year, can track premiums back to 2010, and in real terms shows positives news for customers when taking inflation into account.
Theo Duchen, Co-CEO of Acturis, comments: “In the period from 2010 to 2014, it looks as if inflation as measured by the Consumer Price Index (CPI) will total some 12-14%. In the same period, the increases in the various BIBA-Acturis insurance indices are 2.5% for the consumer index, 9.6% for the SME index and 1.2% for the mid-market Index – all well below inflation for the same period. This underlines how competitive the market for general insurance is in the UK and the fact that consumers are getting a good deal in the sense that the real price for this service is falling year on year.”
Customers looking for suitable insurance can use BIBA’s Find a Broker service either on 0870 950 1790 or at www.biba.org.uk