CAR INSURANCE premiums rose in the third quarter of 2014 for the first time since 2012, according to the latest AA British Insurance Premium Index.
The index revealed that the Shoparound average quote for a comprehensive car insurance, which is an average of the five cheapest premiums found for a nationwide basket of “customers”, increased by 1.2 per cent to £531. Meanwhile, the market average premium rose much more steeply, by 4.2 per cent over the quarter, to £891.
The AA said this suggested that claims pressure is pushing premiums up despite “keen competition amongst the cheapest car insurance providers”.
Janet Connor, managing director of AA Insurance, said premiums had been reduced partly because insurers had anticipated a decline in fraudulent personal injury claims due to reforms promised by the Minstry of Justice in its Legal Aid, Sentencing and Punishment of Offenders legislation.
However, she added: “The truth is, falling premiums had more to do with competitive tension than any benefit afforded by reforms. Premiums are, on average, now similar to their 2010 level and are no longer economically sustainable.”