Motor insurance claim payouts reach record highs
Insurers paid out £2.4bn on all motor insurance claims in the first three months of the year – the highest quarterly figure on record.
Payouts for theft, vehicle repairs, replacement vehicles and personal injury increased 11% on the previous quarter, and by 14% on Q1 2022.
According to the Association of British Insurers (ABI) data, this is the highest quarterly payout since it started collecting the figures back in 2013.
Further, the number of claims settled stood at 600,000, which represented a 14% increase on Q1 last year.
The trade body revealed that the cost of vehicle repairs leapt 33% over the year to £1.5bn. Again, this is the highest figure the ABI has recorded, reflecting rising costs, energy inflation and more expensive repairs.
Meanwhile, the cost of providing replacement cars while vehicles are being repaired jumped 29% in the last year since Q1 2022. The ABI said this reflects longer average repair times, meaning that these vehicles are supplied for longer.
Vehicle theft payouts stood at £152m, rising 29% in the years. The ABI said this in part reflects the rising prices of second-hand cars – 30% in three years.
And when it came to personal injury claims, insurers paid out £642m, up 2% on the previous quarter.
In the year ending Q1 2023, payments dipped by 11%.
“Early indications are that the whiplash reforms introduced in 2021 to create a simplified, fairer, more efficient, and cost-effective compensation system are having an impact,” the ABI said.
Laura Hughes, ABI’s manager, general insurance, said: “Motor insurers continue to deliver when motorists and personal injury claimants need them the most. Like most other business sectors, motor insurers face sustained cost pressures which they are finding increasingly challenging to absorb. Despite this they are doing all they can to ensure competitively priced motor insurance, as well as offering the best possible claims service.”