Annual trend for insurance premiums continues to fall for consumers and SMEs

22nd December 2014

The cost of home and motor insurance has continued to reduce in the last year.  The cost of home insurance premiums paid in Q3 2014 was 4.5% lower than the same period last year.  Motor premiums were also down by 3.5% when comparing the same period.

The figures compare the actual premiums paid from the British Insurance Brokers’ Association (BIBA) and Acturis Insurance Price Index which covers nearly £5 billion of premium per annum and shows that the premiums paid in its consumer insurance ‘shopping basket’ have seen a downward trend each quarter this year with a 4% reduction in Q3 2014.

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 2.5% in Q3 2014 compared to Q3 2013. This reflects a 3.5% decrease in the cost of commercial vehicle policies for SMEs.

The mid-market basket for commercial businesses has seen an increase of 1.6% in Q3 2014 compared to Q3 2013. This is mainly because the combined liability section of the basket has seen a 6.4% increase this quarter whilst other areas of the basket reduced or remained flat.

Graeme Trudgill, BIBA’s Executive Director, said: “Much of the work the insurance industry has undergone with Government has been aimed at reducing the cost of insurance for families and small businesses and the latest BIBA-Acturis price index results show the industry is doing everything it can to offer competitive premiums as prices continue to fall in these areas.”

Steve White, BIBA’s Chief Executive, commented: “We have now completed a full year’s worth of analysis into insurance premium trends.  The annualised 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.”

Theo Duchen, Co-CEO of Acturis, commented: “Despite an annualised Retail Prices Index increase of over 2%, individual consumers and SMEs continue to enjoy reductions in premium and the market shows little sign of let-up in competitive intensity in these segments.  In the mid-market commercial segment we have seen a small increase this quarter but taking into account the small fluctuations in average premium from quarter to quarter, the reality is that the pricing in this segment is pretty stable despite inflation.”

 

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Notes to editors

1. For further information please contact:

BIBA press office:
Leighann Forsyth, Head of Communications
020 7397 0223
forsythl@biba.org.uk 
 

2. About British Insurance Brokers' Association

The British Insurance Brokers' Association (BIBA) is the UK's leading general insurance intermediary organisation representing the interests of insurance brokers, intermediaries and their customers.

BIBA membership includes just under 2,000 regulated firms having merged with the Institute of Insurance Brokers (IIB) in November 2011.

General insurance brokers contribute 1% of GDP to the UK economy and BIBA brokers employ more than 100,000 staff.

53% of all general insurance is sold by an insurance broker and they arrange 81% of all commercial insurance business.

Insurance brokers put the client’s interests first, providing advice, access to suitable insurance protection and risk management.

BIBA helps more than 400,000 people a year to access insurance protection through it’s Find a Broker service, both online and via the telephone.

BIBA is the voice of the industry advising members, the regulators, consumer bodies and other stakeholders on key insurance issues.   BIBA provides unique schemes and facilities, technical advice, guidance on regulation and business support and is helping to raise, and maintain, industry standards.