Motor insurers drop after premiums fall again

9th Apr 2014 11:27

Car insurance premiums fell further in the first quarter of 2014, confounding firms' hopes of a bounce-back and hitting shares in the sector.Prices dropped by 7.5% in the last three months after having shown signs of bottoming out at the end of last year, according to an index from price comparison site Confused.com and professional services company Towers Watson.Comprehensive car insurance premiums dropped 1.1% in the final quarter of 2013, after previous quarterly reductions of 3.9% and 7.9%, the research showed.The latest fall means prices of comprehensive car insurance have fallen about 19% in the last year, sending them below £600 for the first time since 2009.Stephen Jones at Towers Watson said the decline could be due to optimism surrounding potential reforms in the medical assessment of whiplash and possible action on third party repair and hire costs.Jones said: "This quarter's price reductions are sizeable, even allowing for the fact that motor insurers may wish to be tactically competitive around this time of year due to growing new vehicle registrations."Shares in car insurers fell, with Esure dropping 16.7p or 6.2% to 251p, Direct Line reversing 7p or 2.9% to 231.8p and Admiral backtracking 17p or 1.25 to 1,366p by 11.34 in London.PW