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Highlights:
- The average insurance cost has jumped about 14% in the past one year.
- On average, over 40% drivers said they saw a rise of £38 in the renewal quote in past quarter.
Car insurance premiums in the UK are witnessing the biggest yearly rise in the last five years. In central London, the average policy is nearing £1,000 for the first time, hitting motorists with a significant hike in the premium prices.
A recent analysis from the comparison website Confused.com found that the average insurance cost has jumped about 14% in the past one year, touching £588 annually. This, includes a £32 increase in the last quarter alone.
The website also claimed that even though new rules make it mandatory for insurers to offer fairer pricing to customers at the time of renewals, this was not always the case. On average, over 40% of drivers said that they saw a rise of £38 in the renewal quote in the past quarter.
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Motor dealers blame the global semiconductor shortage behind the rise, along with other factors. As the shortage leads to a delay in the availability of replacement components, repairs are often more expensive, dealers say. This is aggravated by supply chain issues and rising energy prices, which directly add to the repair costs.
On the other hand, those who looked around for better deals after their insurance expired found deals that were up to £50 cheaper. The country's financial watchdog, the Financial Conduct Authority, has encouraged people to explore better insurance deals instead of renewing their insurance.
Let's explore some London-listed insurers and how their shares have been performing.
Aviva Plc (LON: AV.)
Aviva is a leading British insurer and offers services across the globe. It provides a bouquet of insurance products and is an FTSE 100 constituent with a market cap of £11,550.64 million and an EPS of 0.50. On a 12-month basis, the share price has increased by 4.69%, while on a year-to-date basis, it has marginally increased by 0.9%.
Prudential Plc (LON: PRU)
Prudential is another FTSE 100 constituent which offers insurance products in several countries. The company has a negative EPS of -0.78 and a market cap of £24.778.95 million. PRU's share value has slumped in the past year by more than 38%, while on a year-to-date (YTD) basis, it has fallen by 30%. The insurer currently has a turnover (on book) of £9,266,294.82.
Direct Line Insurance Group PLC (LON: DLG)
The British insurer was divested from the Royal Bank of Scotland's insurance division in 2012. With a market cap of £2,606.71 million, the company's stock has a positive EPS of 0.25. But, its 12-month return at present stands in the negative territory at -30.87%. The YTD return is in a similar range at -29.34%. The company's turnover (on book) is £444,538.72.
Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
