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Car insurance costs accelerate for older drivers

• The over 50s have seen the steepest increase in car insurance premiums over the last 12 months
• Premiums for this demographic have increased by 1% in just the last 3 months

 

Older drivers have seen the steepest increase to their car insurance premium in the last 12 months when compared to other age groups, new research from data analytics experts Consumer Intelligence reveals.

The over 50s now pay an average of £413 for car insurance, equating to a 3.3% increase in a year. Premiums for this age group have increased by 1% in the last three months alone. However, despite having the biggest pricing hike, the over 50s still see the lowest premiums of all demographics.

Insurance premiums continue to rise steadily across the market, with prices now 2.2% higher than 12 months ago. As of the end of November 2019 the average motor premium was £820.

The government’s Ogden rate adjustment in August is seen by some commentators as a prime factor for the more recent increases; with insurers forced to pay higher compensation pay-outs to accident victims.

The overall upwards trend is being driven not only by the over 50s, but also drivers aged 25-49. Over the last 12 months, this age bracket has seen an increase of 2.6% to their car insurance costs and typically pay £714.

In contrast, drivers aged under-25 continue to witness reductions to their car insurance policies. This youngest age demographic recorded premium declines of 1.2% over the past 12 months. However, this age group continues to pay the most for car insurance, with average premiums sitting at £1,591.

 

Long term view

Average overall premiums have now increased 23.2% since October 2013 when Consumer Intelligence first started collecting data.

However, since our records began, this general upward trend has not been felt across all age demographics. In fact, differences between age groups remain stark.

“For the under-25s, pricing has actually reduced by 20.4% – driven primarily by telematics. The 25-49s and over-50s have seen increases of 32% and 47.2%, respectively, over the same time period.” says John Blevins, pricing expert at Consumer Intelligence.

 

Telematics

Overall, just a fifth of the top five cheapest car insurance quotes are provided by telematics brands. However, ‘black box’ insurance continues to play an important part in the young driver segment.

Around 59% of the cheapest quotes for the under-25s are now offered up by telematics providers. This figure drops to 13% for drivers aged 25-49 and just 2% for the over-50s.

“Young drivers remain a huge focus for the telematics industry,” says Blevins. “However, when you take the market as a whole, competitive growth remains fairly static. We’ve only seen telematics brands increase their competitive offerings by 1% over the last 2 years from 19% to 20% based on an average of the five cheapest quotes returned.”

 

The regions

Just two regions – Eastern (-0.9%) and Yorkshire and Humber (-0.5%) – saw car insurance premiums fall in the past 12 months. London, meanwhile, recorded the highest premium price rises of 4.8% with the West Midlands (4.5%) following on its tail.

The UK capital continues to attract the highest annual motor premiums at £1,251. The North West (£1,018) was the only other region to break the £1,000 threshold.

The South West (£614) remains the cheapest region for car insurance with the Eastern region (£637) and the South East (£651) queueing up closely behind.

 

Car insurance premiums across the UK

Region Price change seen over the last 12 months
(Sep18 – Sep 19)
Price Index
Last 3 months
(June 19 – Sep 19)
Aug 2019
Average Premium
(5 cheapest)
London 4.6% 1.4% £1251
W Midlands 4.5% 0.8% £994
Wales 3.4% 1.0% £661
NW 2.9% 1.8% £1081
Scotland 2.8% 0.1% £658
SE 2.4% -0.3% £651
NE 1.7% 1.1% £769
E Midlands 1.6% 0.6% £678
SW 0.3% -0.3% £614
Yorks&Humb -0.5% -0.5% £752
Eastern -0.9% -0.7% £637

 


Car Insurance Price Index [free to download]

Download our Car Insurance Price Index to gain insight into market movements, benchmark the major van insurance brands and help you understand the data behind the results. 

 

DOWNLOAD INDEX


 

 

Ends

 

Notes to Editors
1.The cheapest premiums were calculated by comparing the prices offered for 3,600 people by all the major Price Comparison Sites and key direct insurers. The top 5 prices for each person were compared to the previous month’s top 5, then these variations averaged to produce the index.  

 

 For further information, please contact:
Consumer Intelligence
Catherine Carey
PR & Communications Manager
07823 790453

 

About Consumer Intelligence

Consumer Intelligence is a data analytics company that helps businesses execute great customer strategies. For 15 years the company has been benchmarking the insurance market and retail banks in the UK and beyond. The unique combination of benchmark data, consumer research and extensive experience has helped some of the world’s major brands focus on delivering better services to customers and improving their own business performance as a result. For more information, visit the website www.consumerintelligence.com

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