The cost of annual premiums for van insurance have dropped in the last year, says a new report.

Consumer Intelligence compared the prices offered to 600 people by the major price comparison sites and key direct insurers.

The results showed that premiums had dropped by 1.7% to an average of £1,240 a year. However, annual bills are still 35.2% higher than four years ago, when CI first started collecting the data.

Average prices for ‘carriage of own goods’ policies used for business have dropped by 0.9% in the past year, while the prices of ‘social, domestic and pleasure’ policies taken out by owners using vans as second cars or for hobbies are falling faster at 5.5%.

John Blevins, CI’s Pricing Expert, attributes the reduction to increased competition and no tax rises, plus the raising of the Ogden rate, which sets out how much money major personal injury claimants receive.

He said: “Insurers are able to reduce prices as there are no major issues driving premiums currently, and it’s simply the cost and frequency of claims that is having an impact.”