Car and home insurance premiums stay steady

Tuesday, January 10, 2006

Car insurance and home insurance premiums grew very little over the second half of 2005, with no growth in general in the final quarter, according to the latest research.

AA Insurance, which offers both car insurance and home insurance, has revealed that although car insurance in general rose by around one per cent over the year, premiums were down from April 2003.

Home insurance premiums finished 2005 lower than the value they started the year at - a fall of nearly £2 - despite a fourth quarter increase of 0.75 per cent.

Managing director of AA Insurance, Kevin Sinclair, explained the trends: "The market continues to evolve with the internet rapidly growing as a distribution channel, while new brands are adding competitive edge.

"The result has been discounting which has eroded much of the modest increases we saw earlier in the year."

He added: "Although this might seem to be good news for customers, I'm still concerned that if car insurance premiums remain static we might see a sudden upward swing later this year."

AA Insurance uses data for 500 risks associated with car insurance and the same for home insurance to calculate its statistics.

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