Confused.com Car insurance price index : More bad news for young drivers

PRESS RELEASE Car insurance prices continue upwards Results of third quarter 2010 Confused.com/EMB Car Insurance Price Index released • The cost of a typical comprehensive policy has risen £177 since October 2009 • 17-20 year old men received the biggest quarterly increases for comprehensive policies at 10.9% (£284 increase) • Older drivers adding children to their policies also continued to receive above average increases • The average cost of comprehensive cover rose by 8.6% between July and September, a smaller increase than the 14.2% of last quarter, Private motor insurance premiums rose strongly again in the third quarter but are showing signs of slowing, the latest edition of the Confused.com/EMB Car Insurance Price Index (CIPI) has found. Whilst the average cost of comprehensive cover rose, there is hope for drivers as it seems the rises are finally starting to run out of steam. Prices have risen by 37.5% in the last 12 months, with premiums now standing at £650 on average. 17 – 20 year olds have seen prices rise by a massive £617 over the last 12 months and those hoping to save money by opting for third party, fire and theft (TPFT) face a further blow. Drivers buying TPFT have faced above average increases, 11.7% this quarter and 54.2% since October 2009. Darren Black, head of motoring at Confused.com, commented: “Whilst it is undoubtedly more bad news for consumers, there is potentially light at the end of the tunnel with the hikes seemingly losing momentum. Once again young drivers have borne the brunt of increasing premiums, suffering across the board with rises in their age group and in the type of insurance they choose. Young male drivers continue to suffer higher premiums than their female counterparts and there has been recent call for gender bias to be removed. It is important to note, however, that women do not pay less for their premiums because of positive discrimination but based on statistical evidence suggesting that, on average, they have smaller, less expensive accidents. Insurance providers worrying about parents potentially fronting for their children in the face of the massive price hikes have also pushed prices up for those who choose to add someone other than their spouse to their policy. 46-50 year old men and women with an insured plus one policy have received increases of 65.6% and 60.3% respectively over the last 12 months. "When talking about premiums, it would be impossible to leave out the effect of fraud, whether large- scale operations or simply embellishing personal injury for compensation, it is not a victimless crime and it is unfortunately honest motorists that pay. The National Fraud authority1 suggest that dishonest insurance claims cost around £2 billion a year and Cash-for-crash hotspots have been named in Birmingham, Liverpool, Blackburn, Manchester and Leeds. EMB partner, Peter Lee, said: “The price corrections that have been taking place over the past year or so have been essential to getting many private motor insurers back on an even keel after poor 2009 results. The scale of bodily injury claims inflation revealed in a recent study of 85% of the private motor market has emphasised the need for price rises.” He added: “However, the level of increases is starting to slow down, with each month in the quarter showing flatter price rises than the previous one.” -ENDS- For further information please contact: Press Office, Confused.com 02920 434 398 pressoffice@confused.com Graham Whitehead, EMB 01372 751060 / 07827 953969 Graham.whitehead@emb.com Notes to editors Confused.com and EMB price index uses data from 13 million real quotes 1 As per the Annual Fraud Indicator 2010 About Confused.com: Confused.com is one of the UK's biggest and most popular price comparison services. Launched in 2002, it generates over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include home insurance, travel insurance, pet insurance, van insurance, motorbike insurance, breakdown cover and energy, as well as financial services products including credit cards, loans, mortgages and life insurance. Confused.com is not a supplier, insurance company or broker. It provides a free, objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com's service is based on the most up-to-date information provided by UK suppliers and industry regulators. Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the FSA. Confused.com and EMB price index uses data from 13 million real quotes About EMB: EMB is an award-winning international actuarial and business consultancy and software provider. Best known as an advisor to non-life insurers, an area in which it works with 28 of the top 30 companies in the world, it also has developed its core analytical and predictive modelling capabilities to move into other business sectors and functions, such as banking and asset management, fraud prevention and marketing. EMB employs more than 300 people around the globe and staff numbers have more than doubled in the past five years.