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Law360, London (October 21, 2020, 4:47 PM BST) -- A decline in traffic levels because of COVID-19 restrictions has helped drive down motor insurance bills for three consecutive quarters this year, according to data published on Wednesday by a car insurance price index in association with Willis Towers Watson.
Drivers paid an average of £765 ($1,000), a 2% decrease from a year ago, data published by Confused.com and the broker shows. Comprehensive car insurance premiums decreased by £5, or 1%, in the third quarter of 2020, according to the survey.
"The sudden drop in traffic during the COVID-19 pandemic and fall in accidents and claims continues to apply a temporary downward pressure on the cost of premiums." Graham Wright, U.K. lead for property and casualty pricing at Willis Towers, said.
The insurance brokerage said the continued fall in prices comes amid uncertainty in premium levels, citing warnings in a September report by the Financial Conduct Authority on car insurance pricing practices.
The FCA raised concerns about insurers increasing prices annually at renewal, a widespread practice described as dual pricing or price walking. The regulator wants to ban price walking practices, which are used by the majority of the U.K. insurance industry. It is estimated that the FCA move will save customers £3.7 billion over the next 10 years.
"With further COVID[-19] restrictions being introduced and a market response to the FCA's recently released pricing practices report still to be factored in, uncertainty in premium levels continues," Wright said.
Prior to the latest third quarter statistics on car insurance premiums, a separate price study conducted by the Association of British Insurers, said COVID-19 movement restrictions in part have helped drive down prices to 2016 levels.
--Additional reporting by Martin Croucher. Editing by Alyssa Miller.
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