Motor insurers paid out a record £9.9bn in compensation in 2023, with steepling repair costs contributing significantly to the amount.
According to the Motor Insurance Claims Tracker published by the Association of British Insurers (ABI), the figure represents an 18% increase on the £8.4bn paid out in 2022.
It reports that claims volumes also rose last year, up 10% to 2.3 million.
Accounting for much of the increase was rising repair costs, which rose by 31% from £4.7bn in 2022 to £6.1bn last year. On top of this, material prices were up 16% and labour costs increased by 15%.
Meanwhile, the individual and accumulated cost of vehicle thefts also rose, with average theft claims climbing to £12,600 and the annual total up to £669m – up from £543m the previous year.
Insurers also saw record rises in mobility costs, with the £597m paid in 2023 representing a 35% increase on the £444m paid in 2022.
However, personal injury payouts actually fell by eight per cent, from £2.6bn in 2022 to £2.4bn last year.
Jonathan Fong, the ABI’s Manager, General Insurance Policy, said, “Significant and sustained cost pressures faced by insurers, such as a 31% 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. Through our recently published Roadmap, the industry is working hard to combat rising motor insurance costs.”
