Claims costs outstripping premiums
Motor premiums rose one per cent in the first quarter of 2024, although average motor claims were up by eight per cent to an average of £4,800 during the same period.
This is according to ABI’s Motor Insurance Tracker, which analyses nearly 28 million policies sold every year and the claims paid against them.
It found that the average comprehensive car insurance premium is now £635 which, taking inflation into account, is only £8 more in real terms than their peak in late 2017.
By contrast, claims costs have risen by 23% in real terms since 2017, with last year particularly challenging for insurers, who paid out £1.14 in claims for every £1 collected in premiums.
Mervyn Skeet, the ABI’s director of general insurance policy, said: “We understand that car insurance costs are putting pressure on household finances. These figures show how competitive the motor market is, with insurers absorbing significant cost rises but keeping prices relatively stable. Even though these figures demonstrate a slowdown in price increases, we won’t be taking our foot off the gas when it comes to our work on tackling the cost of cover.”
