Insurance Firms Pocket £1.3bn During Pandemic

Fri 3rd Jul 2020

Fewer cars on the roads means fewer accidents and that has meant that many car insurance firms have made healthy profits during the coronavirus lockdown.

A study by price comparison website Safe looked at the policies of half a million policy holders in the UK and found that on average, the insurance companies will have saved £46.92 per motorist during lockdown. With more than 27 million motor insurance policies renewed or taken out in 2019, it’s easy to see how the insurers will have been raking it in at a time when the UK’s road network was relatively quiet.

While many insurers have lowered their premiums for 2020, some have gone so far as to offer fixed refunds to customers based on the lack of driving activity. The Financial Conduct Authority has also asked insurers to reconsider how risky their customers are in the current covid-19 climate. 

Antoine Fruchard, insurance expert at Safe, said: “With most people stuck at home, their cars have inevitably stayed in the garage. However, it is likely that customers will question why they continued to pay such high insurance premiums while they weren't able to drive. 

“It will be interesting to see if all the insurance companies will make refunds. Competition between them may be increasing in the coming months, and that means customers should see a slight drop in car insurance premiums.”