Insurance companies are generally losing money at the moment, so the prices are actually too cheap if anything, but in such a competitive marketplace they are all struggling to rise them enough and still get business.

The problem is that the costs of accidents have gone up so much.

what used to be 500 quid when someone tapped someone from behind is now potentially:
500 quid for the repair
4000 quid for two lots of whiplash
10000 quid to a "claims specialist" in legal fees and car hire during the whiplash claims process

So if the cost of that accident has gone up more than 20 fold then the portion of your policy that is paying for the risk of that accident has to go up more than 20 fold as well!