2.5 million uninsured cars on UK roads
There are now 2.5 million uninsured on UK roads, according to the new Private Motor Insurance Market Report, published by Lake Market Research. The report also suggests that 84 per cent of motorists want car insurance to be more tightly regulated and only 49 per cent of motorists completely trust the price comparison websites.
Lake compared DfT data on the number of private cars in use and insurance industry data on the number of private cars insured. It found that the proportion of private cars insured peaked at almost 100 per cent in 2006. With the financial crisis and the onset of recession, the proportion of private cars insured fell to just 91 per cent in 2012. This is equivalent to 2.5 million cars currently uninsured in the UK.
Against this backdrop, all eyes now turn to the on-going Competition Commission (CC) investigation to see what action will be taken. In December 2013, the CC published its provisional findings on the 11bn private motor insurance market. It found that “it is not working well for motorists” and is “looking at ways to reduce the cost of premiums”.
One way drivers have been saving money is through shopping around. The research found that 47 per cent of motorists currently use a price comparison website (PCW) and 59 per cent intend to use one in future. Gocompare is the market leader with a 20.4 per cent share but Comparethemarket’s share is rising.
Lake Market Research managing director, Julie Hodgson, commented: “Between 2010 and 2012, total net written premiums (insurers’ income) rose by 2.7 per cent and net claims costs (insurers’ outgoings) fell by 16 per cent….Insurers are in danger of making the same mistake with telematics. Lake’s research found that, while 12 per centof motorists are interested in telematics-based policies, few realise the costs frequently attached to using the car at peak times. If telematics-based policies result in significantly higher premiums, or an enforced reduction in car use, then calls for motor insurers to be regulated by legislation will grow.”