Motor premiums have seen the biggest rise “ever recorded” owing to the government’s decision to raise insurance premium tax and cut the discount rate. The Association of British Insurers said the average price paid for private comprehensive motor insurance was £484 for the second quarter of 2017. That represented an increase of £22 (4.8%) on the first quarter of the year when average premiums were £462. However, compared to the second quarter of 2016, when average premiums were £436, a motorist today will pay 11% more.
Director general of the ABI, Huw Evans, said: “This dramatic increase drives home how important it is the government press ahead with a new framework for the discount rate and call a stop to further hikes in IPT. The UK is one of the most competitive motor insurance markets in the world, but the unprecedented increase in claims costs is driving up prices to record levels. Most younger and older drivers are likely to face increases even higher than this, hurting people who can least afford it. Worryingly these increases are unlikely to be the end of the road if reinsurance premiums go up at the end of the year, adding further costs to insurers".
The full ABI article can be read here