The Association of British Insurers has revealed that motor insurance payouts by insurers jumped by 21% in the third quarter of the year compared to the same period in 2022, surpassing £2.5bn for the second consecutive quarter.
Its data found that insurers paid out the equivalent of £4,821 and settled four claims every minute during the quarter.
Costs were driven by 32% increase in repair costs to £1.6bn, with materials up 16% and labour rising by 15%. Meanwhile, the cost of providing replacement cars surged 47% to £160m.
As a consequence, average motor insurance prices were up to £561, a 29% increase on last year.
Mervyn Skeet Director of General Insurance Policy, said, “Significant and sustained cost pressures faced by insurers, such as a 32% rise in repair costs over the last year, have impacted on the cost of cover. Despite this, insurers continue to do all they can to ensure competitively priced motor insurance.
“As insurers continue to face significant cost pressures, we are working with industry bodies, such as the Society of Motor Manufacturers and Traders (SMMT) and Thatcham Research, to understand areas of shared concern between manufacturers and insurers, such as vehicle safety and security.”
