So which way are insurance premiums actually going?

VAN INSURANCE NEWS ROUNDUP: 7 DAYS ENDING 7 NOV 2014:

So here’s one that will stretch your mind: one insurer says car insurance and van insurance is going down in price whilst another says it’s rising.

In news that squarely falls into the category of one hand not knowing what the other is doing, car insurance provider Esure swears up and down that the price of cover is still on the decline, yet the AA insists that it’s going up. So what in the world is going on here, and which of these insurance organisations is telling the truth?

Esure, the driving force behind Sheila’s Wheels and the operator of one of the major insurance comparison sites out there, says that it’s simply too early to say that premium prices have stabilised or not. The insurer has been reporting drops in its insurance premiums to the point where its share price has tumbled some 6 per cent after it reported its third quarter premium pricing went down by around 7.4 per cent.

Meanwhile, the AA says that average comprehensive costs have gone up 1.2 per cent – or around¬†¬£6 – over the same period of time. So what’s the deal?

Well, for what it’s worth, the AA takes a wider look at the insurance industry as a whole. The motoring organisation takes a long, hard look at a number of insurers before averaging the price changes together – and that means that its figures incorporate price drops and price increases. Meanwhile, Esure is only one firm; sure, it may incorporate more than one insurance provider, and it may be pulling data from a number of other insurers in its comparison website, but it’s not taking as large a picture of the industry as a whole as the AA may be getting.

In other words, both the AA and Esure might very well be right. It’s one of the problems with statistics – you can really say anything you like and have figures to back it up. Whatever the end result is, prices are most definitely still in flux in the insurance industry. THe AA didn’t exactly exhibit a massive jump in prices over the last quarter with only 1.2 per cent average increases; while Esure’s more weighty 6 per cent drop may be frightening its investors, there’s nothing to say that the insurance provider might end up trending up over the next three months.

© 2018 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright notice.

Share your views

To leave a comment on this story, please insert your details below.