Association of British Insurers reports motor premiums fall

The Association of British Insurers has reported that motor insurance premiums have fallen for the first time in two years.

Average premiums fell by two per cent between April and June, or £13, compared to the first three months of 2024, with typical policies now £622.

Despite the recent fall, average premiums remain 21% higher than they were a year ago, or £111.

The ABI said that insurers paid out £2.9bn in motor insurance claims in the second quarter of the year, up by 18% from the £2.5bn paid out in the same period of last year, with repair costs up 28% to a record average high of £3,100 per claim.

Motor premiums fall

Mervyn Skeet, the ABI’s director of general insurance policy, said: “After a very challenging period for insurers and customers alike, we’re encouraged to see an easing of increases to motor insurance premiums as claims costs stabilise.

“While this is good news, we need to continue our work focusing on claims costs, for the good of consumers. It remains a top priority for us and our member insurers.”

Rocio Concha, Which? director of policy and advocacy, said: “It’s encouraging to see premiums starting to fall, and motorists will certainly hope this trend continues. However, with premiums rising significantly over the past year, many drivers opening their renewal quotes will still get a nasty shock.

“To make matters worse, drivers who can’t afford to stump up for annual cover all in one go, and instead pay monthly, can end up paying hundreds of pounds more over the course of a year due to the high levels of interest charged on payments.”