Motor insurance claims payouts hit record levels in 2024
The Association of British Insurers has reported that motor insurance claims payouts last year reached a record £11.7bn.
It attributed this rise partly to higher vehicle repair costs, which totalled £1.9bn in the fourth quarter to take the yearly total to £7.7bn.
This was £1.5bn more than the 2023 yearly total.
Across the year, insurers handled 2.4 million motor claims, with the average payout up 13% on 2023 to £4,900. In the final quarter that figure was even higher at £5,300, which represents an all-time high.
Mark Shepherd, head of general insurance policy at the ABI, said: “Our latest data paints a difficult picture for drivers and the industry alike. Through our 10-Point Roadmap, we’ve been working hard to help tackle the cost of motor insurance and we’ve seen progress in some areas, with average premiums having fallen from their peak. However, we recognise that the price of cover remains a strain on household finances whilst the industry faces significant cost pressures.”
High claims costs
Shepherd continued:
“Industry is doing all that it can, but it is now for government to take the necessary action to combat high claim costs. And it’s vital that government does not further increase costs for hard working households and businesses by raising Insurance Premium Tax at the upcoming Spring Forecast. We look forward to continuing to work with the government and wider sector to help support drivers and tackle claims costs.”
The latest data comes one year after the ABI launched its 10-Point Roadmap, which sets out steps to tackle insurance costs. In an update report, it highlight progress being made in some key areas such as vehicle theft, insurance fraud and uninsured driving.
