Auto insurance prices in U.K. continue to drop

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According to the A.B.I., the average amount paid to cover a vehicle is still on its way downward.

The cost associated with purchasing and owning auto insurance in the United Kingdom has dropped another 9 percent over the last year as a growing number of consumers are using the resources available to them over the internet to be able to comparison shop and find better rates.

This, according to a survey which also credits fewer claims into the dropping premiums.

Auto Insurance SavingsThe data was provided by the Association of British Insurers (A.B.I.) in their most recent quarterly index of auto insurance costs. It was issued by the association this week to reveal the trends regarding the average premiums being paid in that country. In the U.K., the report shows that the last quarter of 2013 saw premiums that were £370 on average. This represented a drop of £36 when compared to the same quarter in 2012.

These recent auto insurance premiums decreases are continuing a sliding trend from the year before.

The year previous to the data in this index also saw decreases that analysts were crediting to the increased use of vehicle policy price comparison websites, in addition to legal reforms that were implemented to prevent fraudulent injury claims.

According to the Head of Motor Insurance at the A.B.I., James Dalton, “Insurers are fulfilling the commitment they made to the government to pass savings from changes to the civil litigation system to hard-pressed motorists through lower car insurance premiums.” Equally, though, insurers are also slashing back their vehicle coverage prices because of the decrease in the cost from claims that was brought about by the reforms in civil litigation and to the warnings from analysts of a risk to earnings.

The ratings agency, Moody’s, explained on Monday that the impact of the reforms from the government weren’t quite as good as the auto insurance companies had been anticipating. The decrease in the premiums don’t equate to a proportionate reduction in claims and could bring about greater underwriting result declines. The market in the U.K. is becoming increasingly competitive, though its traditional leaders remain dominant.

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