Motor insurers report record year of payouts
Motor insurers paid out an average of £1.13m in compensation every hour last year, according to new figures from the Motor Insurance Claims Tracker.
It reported that from 2.3 million motor claims submitted last year, the total paid out was £9.9bn, which was 18% more than in 2022 and the highest amount recorded since the Association of British Insurers (ABI) began collecting the data in 2013.
The escalation was largely attributed to higher repair costs, which jumped by 31% from £4.7bn in 2022 to £6.1bn last year. Materials and labour costs rose by 16% and 15% respectively, with some garages reporting a staggering 300% rise in energy costs.
Meanwhile, payouts for vehicle theft rose by 23% to £669m, courtesy car costs were up 35% to £597m, and personal injury claims added up to £2.4bn – down eight per cent from the £2.6bn recorded in 2022.
Jonathan Fong, ABI 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.”
