The UK's motor insurance market is facing an alarming acceleration in premium rates, according to the latest report by Consumer Intelligence. The past year has seen a record-breaking 34% surge in average quoted premiums, with the last quarter alone witnessing a 14.3% jump. This drastic uptick, the largest since the tracking of such data began in October 2013, could potentially jeopardise road safety, especially among younger motorists.
Industry experts have raised concerns about the scarcity of affordable deals in the market for new business customers, impacting younger drivers the most. The under-25 demographic has seen a marked increase of 28% in their insurance premiums over the past year. Despite this being the smallest percentage increase among all age groups, the average quoted premium for under-25s remain significantly higher at £2,145, compared to £850 for the 25 to 49 age group and £568 for the over-50s.
Telematics policies, usually a haven for cheaper quotes and favoured by younger drivers, have seen a reduction in their competitive share from 33% to 30% over the past year, indicating a drying up of lower-cost insurance deals.
"The motor insurance market is witnessing unprecedented premium inflation," says Max Thompson, Insurance Insight Manager at Consumer Intelligence. "The sudden vanishing of lower-priced deals particularly threatens younger drivers, who are already grappling with higher-than-average premiums."
Consumer Intelligence has concerns that the potential repercussions this could have on road safety. The lack of affordable options may deter younger drivers from taking insurance, leading to an increase in the number of underinsured drivers or forcing illegal practices such as "fronting".
Londoners and drivers from the East Midlands have faced the steepest increases in quoted premiums, with respective rises of 39.9% and 37.8%.
Consumer Intelligence calls for action from insurers, government bodies, and industry regulators to address the issue and ensure the safety and accessibility of road use for all, especially younger and more vulnerable drivers.
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