LONDON (Reuters) - Car insurers put up prices at a slower pace during the first quarter, reflecting concerns about regulatory changes and the impact on consumers of higher taxes, according to a closely-watched survey.
The annual rate of price inflation for comprehensive cover fell to 35.7 percent at the end of March from 37.8 percent at the end of last year, marking the first slowdown since mid-2008, price comparison website Confused.com and management consultants Towers Watson said on Wednesday.
The more moderate increase comes as motor insurers digest the impact of a Europe-wide ban on setting different insurance prices for men and women, as well as higher taxes on insurance premiums and efforts by Britain to curb litigation costs, Towers Watson and Confused.com said.
The changes “make it hardly surprising that many are taking stock of their position,” Peter Lee of Towers Watson said in a statement.
Car insurance prices began to increase three years ago as insurers rushed to recoup a big increase in personal injury claims, fuelled by the growing influence of “no win, no fee” lawyers.
Motor insurance prices had fallen or stagnated for much of the previous decade, held back by intense competition.
Europe’s highest court last month barred insurers from charging men and women different prices in a move expected to increase car insurance costs for women.
Last year, a review commissioned by the government recommended a package of measures aimed at reducing the legal costs borne by the losing party in personal injury cases, potentially reducing the impact on insurers.
Drivers on average pay 835 pounds a year for comprehensive cover, said Towers Watson and Confused.com, part of motor insurer Admiral (ADML.L). (Reporting by Myles Neligan; Editing by Jon Loades-Carter)