Consumers make real terms saving of nearly 7% on home and motor insurance
18th August 2014
The cost of home and motor insurance has reduced in real terms by 6.8% in the last year.
Premiums fell by 4.9% in Q2 2014 compared to Q2 in 2013. This coupled with the current inflation rate of 1.9%2 provides a real term customer saving of nearly 7% (6.8%) on home and motor insurance in the last year.
The British Insurance Brokers’ Association (BIBA) and Acturis Insurance Price Index, which covers nearly £5 billion of premium per annum, shows that the premiums paid in its consumer insurance ‘shopping basket’ have continued to reduce.
Consumers are seeing a downward trend in motor and home insurance costs, although this is slowing down for the home insurance market. The index shows that home insurance premiums fell by 4.2% in Q2 compared to 5.4% in Q1 2014.
Graeme Trudgill, BIBA’s Executive Director, said: “Overall this is great news for customers and shows that the government and industry initiatives are working to reduce the cost of motor insurance. We look forward to seeing further plans coming from the Government such as the young driver Green Paper from the Department for Transport.”
Steve White, BIBA’s Chief Executive, commented: “We’ll watch household premiums with interest to see if the slowdown in the reduction of premiums is a one-off or whether the downward trend will continue.”
Other ‘baskets’ in the index have remained steady with the SME and larger commercial baskets fairly flat. However within the SME basket, commercial vehicle policies have seen a small increase of 0.2% for the first time since Q3 2012.
The mid-market has seen a small reduction of 0.4% with a downward movement in average premiums seen in Q1 and Q2 this year. The last time this was observed was Q2 2012.
Theo Duchen, Co-CEO of Acturis, commented: “There have been interesting developments in the SME index during Q2 this year. The small increase to commercial vehicle policies is likely to be the result of some insurers withdrawing from the market, but this is countered by continued intense competition in the property and liability elements of the index. We will continue to monitor this during the next quarter to see if this trend settles or continues.”
Notes to editors
1 Premium reductions in the Consumer shopping basket:
Motor premiums fell by 5.6% in Q2 2014 compared to Q2 2013
Home insurance premiums fell by 4.2% in Q2 Q214 compared to Q2 2013
Consumer shopping basket fell 4.9% in Q2 2014 compared to Q2 in 2013
3. Shopping baskets
The shopping baskets in the BIBA/Acturis Price index includes three ‘shopping baskets’ to represent insurance buyers. A consumer basket including a motor and home policy; a small and medium enterprises (SME) basket made up of a package policy and a commercial vehicle; and a larger commercial basket made up of a commercial combined, fleet and combined liability policies.
4. For further information please contact:
BIBA press office:
Leighann Forsyth, Head of Communications
020 7397 0223
5. 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.