The UK government is launching a new motor insurance taskforce in a bid to bring down the price of motor cover.
The taskforce will work to identify the factors behind higher premiums and find solutions to keep costs under control.
It will also assess whether consumers are receiving fair value for money and look at the impact on the groups hit the hardest.
Experts from regulators, motoring groups, insurers and consumer groups will make up the taskforce.
It comes after Labour, which came into power in July 2024, said it would crack down on the cost of car insurance during its election campaign.
Transport Secretary Louise Haigh said: “The rising cost of cover affects all drivers, but some groups have been hit harder than others. No matter your background or circumstance, this government is determined to ensure drivers get a fair deal.
“Our new expert taskforce is a major step forward in delivering a fair deal for drivers. It will give this issue the attention it deserves – rooting out the factors driving up costs for industry and ensuring drivers are able to hit the road.”
Insurer response
Factors that have led to increased premiums in recent years include inflation, rising car thefts and potholes.
And EY estimated that in 2022, for every £1 paid in premiums, insurers incurred £1.11 in claims and expenses. This figure rose to £1.14 in 2023.
However, the Confused.com and WTW Car Insurance Price Index, published on 14 October 2024, showed that motor premiums have dropped for three consecutive quarters.
Its data showed that the average premium fell by 2% (£21) between July and September 2024, with UK motorists now paying £861 on average.
While premiums are starting to come down slightly, Colm Holmes, chief executive at Allianz UK, said the “cost of insurance has become a headache for many motorists who are struggling with wider cost of living pressures”.
He added: “The problem is compounded by a range of factors, including an increase in the number of accidents in recent years, the cost of repair rising at above the inflation rate, the prevalence of insurance fraud and motor theft, as well as the poor disrepair of our roads.
“The taskforce is a clear step forward as we can make more headway on this complex issue if the industry, regulators and government try and tackle it together.
“Though premiums are showing signs of falling, we want to ensure that direction of travel continues and so we look forward to helping the taskforce explore all the challenges.”
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.