Admiral leads gains on hopes for lessened price competition

17th Jan 2014 13:59

Car insurance premiums fell by 12.5 per cent year-on-year during the last three months of 2013, according to the latest survey data from Confused.com and Towers Watson.Thus, the average comprehensive car insurance price now stands at £644, 25% below the all-time highs reached in quarter two of 2011. Gemma Stanbury, Head of Car Insurance at Confused.com, attributed the drop to the introduction of the European Union's (EU) Gender Directive at the end of 2012.However, she added that the latest data shows that price rises may be on the horizon. Indeed, in terms of quarterly rates of change car insurance premiums dropped by 1.1% in quarter four, following on the heels of a decrease of 3.8% in quarter three. Some market is inferring from the above that price competition in the sector between rival insurance suppliers may be on the wane.Hence the rise his afternoon in shares of Admiral, which now top gains on the Footsie. As of 14:25 stock in the company was advancing by 6.25% to the 1,408.1p mark.Others in the sector, including RSA Insurance, esure and Direct Line were all making gains in afternoon trade.AB