Car Insurers Have Saved £42 Millions in North East England During Covid-19 Lockdown

£ 42,393,050

…is the estimated amount of savings on payouts realized by the UK car insurance companies in North East England during Covid-19 lockdown, as drivers stayed home between 23 March and 31 May.

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Claims drop during lockdown

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Cost of claims in a “normal” 77-days period

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Car insurers’ savings during lockdown

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North East England big numbers

57%
drop in car claims
 

…across North East England

14.7
million pounds saved


…by car insurers only in the Newcastle metropolitan area.

£51.7
average decrease

…of annual insurance car premiums

57% drop in car-related claims

With the UK locked down from the 23rd of March, most English citizens were forced to stay at home. As a consequence, daily commutes came to a halt, meaning fewer people on the roads, and a lower probability of accidents occurring. With a 57% drop in car-related claims, North East England is the second region in the UK where those claims have decreased the less, together with Scotland (51%).

Overall, insurance companies in North East England could have actually saved up to £42.4 millions thanks to the change in driving habits caused by lockdown measures.

  • The North East England metropolitan area accounting for the highest savings is Newcastle, with a £14.7 million reduction in payouts by the insurers. The city of Sunderland ranks number 2, with almost £2.9 million saved by the insurers.
  • Usually, motor insurers put aside ⅔ of premiums to cover road accidents. However, the reduction in the number of accidents has cut that  proportion significantly. One big car insurance player expects it will save as much as half the funds it expected to have to pay out for personal injury claims in 2020.

Will customers receive their money back?

With the savings made while North East England was locked down, the big insurance companies decided to reduce the premiums for their customers. That is why it has been observed in the region an average £51.7 annual price reduction on car premiums per customer. Indeed, the average annual premium was £644 as for March 2020, and has gone down to £592.2 at the beginning of June – which represents an 8% decrease in prices for the North East England drivers.

Admiral was the first car insurance company in the UK to announce a £180 million spending including a fixed £25 refund to each of its car and van insurance customers – which could represent a £7.4 millions refunds sum for the clients from North East England. Others are planning on refunding only customers that were affected by the pandemic, such as the unemployed or people placed on a government furlough scheme by their employer. 

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Antoine Fruchard, insurance expert and CEO at hello-safe.co.uk

Although North East England is one of the regions of the United Kingdom where claims have decreased the less, we could observe that the car insurance industry saved there a lot of money during the lockdown. For example, in the only city of Hartlepool, those savings accounts for more than £1.5 million during the whole period, which is a lot. Now that the lockdown is over, the number of cars on the road could soon be back at pre-Covid levels. It is likely that customers will question why they continued to pay such high insurance premiums while they weren’t able to drive. While some insurance companies have already made refunds, it has been observed a £51.7 average decrease in car premiums in North East England between March and June, which proves that the competition is hard between the major motor insurers”.

Our methodology

We based our study on public information provided by reliable data-providers – such as the ABI, Which, Willis Tower Watson and Money Wise – and 18 European insurance partners who provided us anonymously with claims for the period from the 23rd of March to the 31st May. 545,560 policy holders from all the UK regions have been taken into account. For further information on our editorial guidelines please click here.

About hello-safe.co.uk

Hello-safe.co.uk is a comparison platform which is shaking up the insurance market – giving you access to the best UK insurance deals in less than 30 seconds. Hello-safe.co.uk is supported and financed by Blue, an Insuretech Venture Capital firm. Blue already owns two leaders in the French insurance comparison market, Réassurez-moi and Coover. These platforms help more than 10 million people with their insurance every year. We have developed a unique comparison technology that gives access to cover details and quotes without customers having to give their phone number or email address. This engine is the result of four years of hard work.

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