Competition chiefs urged to probe car and home insurance firms as premiums soar by more than 40%

Senior Conservative MP Sir Robert Syms calls for investigation into whether insurance firms are ripping off customers
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Competition chiefs are being urged to probe the car and home insurance market as premiums soar by more than 40 per cent.

Senior Conservative MP Sir Robert Syms called for an investigation into whether insurance firms are ripping off customers.

The Poole MP tweeted: “I pay Aviva just under 1k for comprehensive car insurance have just been quoted 2.4K for next year - have had some constituents complain!

“In a year of low inflation how can this be justified? Is it time for Competition commission (Competition and Markets Authority) to look at Insurance companies!”

The average quoted price of home insurance jumped by 40.6 per cent in the 12 months to January, according to an index.

It was the highest annual increase since financial services insights firm Consumer Intelligence started tracking prices in 2014.

London saw the third highest jump of 42.2 per cent.

Quoted premiums for households containing the under-50s rose slightly faster than for over-50s households, at 41.2 per cent compared with 39.7 per cent.

Homes built between 1970 and 1985 attracted the highest typical annual increase in quoted premiums at 43.7 per cent. Properties built between 1940 and 1955 had the lowest annual increase in quoted premiums, at 38.3 per cent.

Matthew McMaster, senior insight analyst at Consumer Intelligence said: “Over the last 12 months, new business quoted premiums for buildings and contents insurance have increased by 40.6 per cent.”

But Consumer Intelligence added there are signs that price rises could be slowing.

In the three months to January 2024, quoted premiums rose by 7.6 per cent, which was lower than the rises of 8.5 per cent and 9.9 per cent recorded in the previous two quarters.

Part of the reason for the slowdown is the launch of new, more competitive policies – although customers who have made claims could see additional increases in the coming months following the recent storm damage, Consumer Intelligence cautioned.

Consumer Intelligence analyses quotes on price comparison websites to compile the data, using averages taken from the cheapest premiums for common risks.

The annual rises in home insurance quotes across Britain, according to the index, were:

* Wales, 43.2 per cent

* South East, 42.6 per cent

* London, 42.2 per cent

* Scotland, 40.7 per cent

* Yorkshire and the Humber, 40.5 per cent

* North West, 40.3 per cent

* West Midlands, 40 per cent

* South West, 39.7 per cent

* North East, 39.4 per cent

* East Midlands, 39 per cent

* Eastern England, 38.9 per cent

People renewing their car insurance have also seen large, double-digit rises.

A spokesperson for the Association of British Insurers (ABI) said: “A succession of storms have swept across the UK in recent months causing widespread property damage, with £352 million being paid out to support customers whose homes were damaged by storms Babet, Ciaran and Debi alone.

“Despite rising cost pressures, including above inflation rate rises in the cost of many building materials, insurers are totally committed to continuing to offer competitively priced home insurance.

“Our latest data – which is the only collection based on prices paid rather than quotes – shows that the average combined home and buildings insurance premium for 2023 was £341, a 13 per cent increase on 2022.”

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