2022 UK insurance industry watch covers the most important news stories, trends, research, opinion and developments for 2022.

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2023 – Looking Ahead to Next Year for UK Car insurance

With the year 2022 rapidly drawing to a close and another year over for the UK insurance industry, the question on every motorists lips is ‘what is my motor insurance premium going to look like in 2023?’. The global economic crisis is likely to play a significant role in whether insurers will be forced to hike up premiums still further or whether they can weather the storm and keep policy costs low for drivers across all categories.

One of the best tools and guides for researching this sector is the Confused.com car insurance price index. The most recent analysis illustrated that The overall picture was that car insurance prices continue to rise and this is likely to be continued into quarter 1 of 2023. UK drivers now paying £586, on average, according to the latest Confused.com car insurance price index, powered by WTW. The figures show a £72 (14%) increase in the past 12 months. This is the highest yearly increase to car insurance prices in the last 5 years.

The report from Confused.com also breaks down the statistics by average prices by region and average prices by age. In respect of the different regions in the UK, drivers in London saw the biggest increase for car insurance prices. Inner London was the region that saw the biggest rise in premiums over a 12-month period, with drivers now paying £936, on average, for their car insurance. That’s an annual increase of £132 (16%).

The data for the average prices by age produced what could reasonably have been predicted by mosy – young drivers still paying high premiums! In fact, young drivers are still paying more than £1,000 for their car insurance. Figures show that drivers aged 18 are currently paying £1,581, on average. That’s an annual increase of £202 (15%), on average. Generally, drivers aged 32 and younger faced the biggest annual increases of £100 or more. Older drivers have also seen increases in the past 12 months. Drivers aged 69 saw a £32 (11%) year-on-year increase, on average.

November 2022. ENDS

The Rise of Electric Vehicles

Last year saw the biggest annual increase in number of registrations, with more than 175,000 electric vehicles registered showing a growth of 66% on 2019. Electric vehicle registrations continue to rise in absolute numbers, with 32,522 new registrations in November 2021 (21,726 BEVs and 10,796 PHEVs).

Types of Electric Vehicles
BEV. Battery Electric Vehicles, or BEVs. These are cars that are powered only from an electric battery.
PHEV. Plugin Hybrid Electric Vehicles, or PHEVs. These are cars that have both an electric battery and a combustion engine. …
Hybrid. Hybrid cars have an electric battery and a combustion engine.

Many industry observers believe we have already passed the tipping point where sales of electric vehicles (EVs) will very rapidly overwhelm petrol and diesel cars. It is certainly what the world’s big car makers think. Jaguar plans to sell only electric cars from 2025, Volvo from 2030 and recently British sportscar company Lotus said it would follow suit, selling only electric models from 2028.

And it isn’t just premium brands. General Motors says it will make only electric vehicles by 2035, Ford says all vehicles sold in Europe will be electric by 2030 and VW says 70% of its sales will be electric by 2030. Many governments around the world are setting targets to ban the sale of petrol and diesel vehicles gives impetus to the process. But what makes the end of the internal combustion engine inevitable is a technological revolution. And technological revolutions tend to happen very quickly.

Recently CARWOW published their list of the best electric cars for sale in 2022
The best electric cars are practical, have comfortable interiors and good levels of equipment. Electric vehicles are great fun to drive thanks to their immediate acceleration and the cars here have decent a decent range too:

1. Tesla Model 3
2. Porsche Taycan
3. Kia EV6
4. Peugeot e-208
5. Audi e-tron GT
6. Hyundai Ioniq 5
7. Kia e-Niro
8. Volkswagen ID.3
9. Ford Mustang Mach-E
10. Mercedes EQC

Electric Vehicle Insurance
Low quotes for your new UK Electric Vehicle Insurance policy. More and more people are opting for EVs, not only because they are considered environmentally friendly, but they can also help keep costs down as fuel prices creep up. 

Electric Car Insurance Comparison
Low quotes for your new Electric Car Insurance comparison policy. The potential future market for this type of policy in the UK is enormous. There are an increasing number of motor insurance policies specifically designed to cover this type of battery powered vehicle(s).

Electric Van Insurance Quote
Electric Van Insurance quotes that are sure to deliver a great policy, at an ultra competitive price. Policies will deliver the right level of driver and commercial EV cover for all types and size of business across the UK.


Car insurance costs increase for first time since Autumn 2020

Following on from the changes to the UK insurance sector which came into force in January this year, we are seeing a definite spike in the cost of car insurance policies for many drivers. Latest figures suggest these reforms have led to a rapid acceleration in the price of car insurance premiums. The introduction of these reforms were specifically designed to stop the exploitation of repeat customers by leading insurers. The new rules were put in place to stop UK insurers charging higher prices to loyal customers who automatically renewed their premiums each year, with discounts only offered to new customers.

The Financial Conduct Authority (FCA), which implemented the changes, said the move could save loyal customers about £120 per year. However, the insurers have in the past always found ways to make up any loss of revenues by passing on increased rates to other categories of motorist – seemingly this is exactly what is now happening.

Leading comparison website ComparetheMarket says car insurance premiums have gone up £64 year-on-year for the first two weeks of January, with the average cost being £700 per year. However, there are still deals to be found, because not every insurer has been passing on increases, with the cheapest premium still hovering around £573. At the start of January, the cheapest premiums have only increased about £31.

Ursula Gibbs, director at ComparetheMarket, said: “Our research shows the cost of car insurance is rapidly accelerating in January. The average premium has jumped £64 year-on-year. The cheapest deals available are also becoming more expensive so drivers will need to be quick if they want to secure a great price. The savings available to customers looking to switch could reduce significantly as more insurers hike their prices.”


How Long Have You Driven With No Insurance?

Or, more pertinently how long do you think you could get away with driving on UK roads with no driving licence? With ANPR technology and the proliferation of police officers driving around in their own vehicles patrolling our road network, you would probably assume the answer to be not very long!

It has come to light that a man in his 80’s has been driving around in the UK with no driving licence or car insurance for over 70 years! The man is to be prosecuted by police after he was pulled over in a Mini One near Tesco Extra, in Bulwell, Nottingham, in January 2022. Police said the driver, born in 1938 told them he had been driving with no licence or insurance since he was 12 and had never been stopped by officers.

Nottinghamshire Police confirmed the man would be prosecuted for driving without a licence and driving with no insurance. Inspector Christine Busuttil added: “We would like to reassure the public we are regularly out on patrols, use camera vans and run operations to clamp down on motorists who commit offences on our roads and place other road users at risk.”

The Bulwell, Rise Park and Highbury Vale Police team wrote on Facebook that ‘thankfully’ the driver had never had an accident. They said: “Due to the increased number of ANPR cameras in Nottingham, even on the small trips, you are likely to hit a camera, so make sure your documents are in order, because it will catch up with you, one day.”


People of Colour may be Paying Higher UK Motor Insurance Premiums

A charity has called on regulators to investigate following concern that people from ethnic minority backgrounds could pay more for car insurance. Citizens Advice claims its own investigation found people faced a £280 a year “ethnicity penalty”. Insurers say ethnicity is never a factor when setting premiums, as such discrimination would be illegal.

The charity analysed 18,000 car insurance costs reported by people across England and Wales who came to Citizens Advice for debt help last year. It concluded that, on average, people from ethnic minority backgrounds paid £250 a year more than white people – regardless of gender, age and income.

The Association of British Insurers (ABI) said insurers never use ethnicity as a factor when setting prices, to comply with the law. James Dalton, its director of general insurance policy, said: “All other rating factors being the same, two people of different ethnicities who live in the same postcode will pay the same premium for their car insurance.

Citizens Advice called on the City watchdog, the Financial Conduct Authority (FCA), to investigate. “It is time for the FCA to lift the bonnet on insurance firms’ pricing decisions and ensure no one is paying more because of protected characteristics like race,” said its chief executive, Clare Moriarty.

Source: BBC & Citizens Advice


Avoiding Car Crime

Always a good idea to provide our website visitors with a clear and simple guide to avoiding car crime in the UK. Vehicle thefts up three per cent in 2021 according to Police who recorded 48,400 vehicles as stolen in 2021, with the Ford Fiesta, Range Rover and Ford Focus the most commonly stolen models.

The fourth-most stolen car in 2021 was the Volkswagen Golf (1,755), after which came the Mercedes C-Class (1,474), BMW 3 Series (1,464), Land Rover Discovery (1,260), Vauxhall Corsa (1,218), Vauxhall Astra (1,096) and Mercedes E-Class (818).

Don’t let thieves get an easy ride. Follow these simple rules to protect your vehicle from thieves:

1. Lock your vehicle
Locking your vehicle, even when filling up or parked on your drive, greatly reduces the possibility of it being targeted by an opportunist thief. Even if you have locked your vehicle, check you haven’t left any windows or the sunroof open.

2. Keep the keys safe
Vehicles today are by and large more difficult to steal than ever, unless the thief can access your key or fob to clone them. Keep your keys safe, out of view when at home, and away from your front door. It’s not uncommon for car keys to be stolen from inside your home by thieves fishing for them with a stick and hook through the letterbox.

3. Be aware of carjackers
The fact that you’re in the car isn’t always a deterrent to someone trying to steal it.

4. Park responsibly
It’s always advisable to avoid parking in dark and secluded areas. It’s worth an extra five or ten-minute walk if it means your vehicle is left in a well-lit and busier street.

5. Watch for illegal tow trucks
Thieves often attempt to lift vehicles from the street, literally. So, if you see a towaway crew acting suspiciously – especially if their vehicle isn’t branded or if they’re not in uniform – then please report it immediately.

6. Fit good in-car security locks
Bear in mind that built-in steering locks aren’t necessarily thief-proof. Many can be forced and broken. Fitting a Sold Secure steering wheel, gear lever or clutch pedal security device can give your vehicle added protection.

7. Double-check electronic locking
Electronic devices can be used to jam the electronic signal from your key fob to lock your vehicle. Always manually check your vehicle has locked before walking away.

8. Before owning, check for cloning
Changing the identity of a vehicle, known as vehicle cloning, can be as simple as adding stolen number plates. When buying a vehicle, always check the DVLA V5 document and make sure the Vehicle Identification Number (VIN) on the vehicle is the same as on the document.

9. Secure your port
Many modern vehicles are fitted with engine management diagnostic ports, which can unlock and start your vehicle. If your vehicle has this type of port, consider fitting a lockable cover.


UK Car Insurance – What’s Next?

With a backdrop of inflation and rising interest rates – what is next for the UK car insurance industry?
Independent think tank the Resolution Foundation recently told BBC Radio 4’s Today programme inflation is heading “over 10%, and that peak won’t come until the early part of 2023”.

There aare many different factors in play and lots of different shocks happening at once to the UK economy and to inflation. Some of those wider shocks are easing but others are getting worse.

The latest Confused.com Car Insurance Price Index, in association with WTW, shows an increase in comprehensive motor insurance premiums in the UK both in the last 12 months and quarter. A combination of rising accident frequency after the pandemic lull and surging inflation sees upwards pressure on insurance prices coming from claims costs and repairs.

These challenges are compounded by insurers also having to respond to the FCA’s (Financial Conduct Authority) pricing reforms, effective from January, which bans renewal prices being higher for existing customers than for new business. In the second quarter of 2022, car insurance premiums stood at £554 on average – a 6% jump from £522 in the same period last year. From the previous quarter, the rise was less steep, at 1%.

According to the index, the cheapest region when it comes to motor insurance remains the Scottish Borders, where the average cost in Q2 was £366. As for the highest price tag, Inner London continues to be on top of the pile, with policyholders there paying an average of £882. In opinion – Motor insurance prices have yet to skyrocket, despite the cost pressures, and remain fairly low by historical standards. Looking ahead, the picture is more mixed with the industry facing a raft of challenges over the second half of 2022 and into 2023.

Still, despite all these things in play, no doubt an opportunity exists for insurers to be as competitive as possible in terms of pricing, as consumers seek to make savings where they can, given the current economic landscape.


My Partner Pays a Higher Premium Due to Being Born Outside the UK

If your partner in the United Kingdom was born outside of the UK then you may know that they are paying a higher car insurance premium than you? Even where all other factors are identical and they have been driving safely in this country for many years. Without doubt there is a higher price to pay for car insurance renewals if you are born outside the UK.

The disadvantage (discrimination?) is clear for people who were born outside the UK when choosing their motor insurance policy. Often the premium quoted can be as much as £30-40 more than if the individual had been born in the UK. One might accept that this could be the case where the driver is new into the UK, however this raising of premiums seems to still apply even where the person has been in the UK and driving without incident for over 20 years??

However, research shows that even if the motorist had been on British roads for 50 years, it would be the same story and the price difference is significant. A comparethemarket.com survey found that drivers with a UK licence who were not born in the UK are charged average annual premiums of £837, compared to £595 paid by the average UK-born driver. Those with an international licence can expect to pay more than £1,500. Insurers call it “risk assessment”; to the rest of us it looks like discrimination.

According to the Association of British Insurers, providers always comply with equality legislation, even though the Equalities Act says customers cannot be disadvantaged because of their nationality. In practice, it seems that they can be, provided companies have strong justification for doing so. “Strong justification” in this situation is the insistence by insurers that drivers born overseas tend to make higher claims. As always, insurers have different attitudes to risk and some have been known to raise prices higher for foreign-born applicants than others, so it pays to shop around.

As always you can spread the cost of your next renewal by choosing Pay Monthly Car Insurance

Source: The Guardian Money