Record £9.9 billion paid out in motor insurance claims last year

MOTOR insurers paid out a record amount in claims last year, according to the Association of British Insurers (ABI).

The £9.9 billion paid out in 2023 is the highest annual figure since the ABI started collecting data in 2013.

The total was up by 18% on the £8.4bn paid in 2022.

The overall number of claims settled, at 2.3 million, also rose by 10% compared with 2022.

The cost of vehicle repairs at £6.1bn jumped by 31% compared with 2022. This reflected continued rising costs, with insurers reporting increases for materials and labour, the ABI said.

It added that garages also faced rises in their energy costs during 2023.

Payouts for vehicle theft and thefts from vehicles also jumped, to £669 million. This total, and the average theft of a vehicle claim of £12,600, were both the highest on the ABI’s records. The cost of providing temporary replacement vehicles, at £597m, increased by 35% compared with 2022. This represented another annual record since this data has been collected.

As part of the overall payout figure, insurers paid out £2.4bn in personal injury claims, a figure which was down by 8% on the previous year’s total of £2.6bn.

Higher costs have also impacted the price of cover paid by motorists, with the average price paid for motor insurance in 2023 put at £543 by the ABI, 25% more expensive than in 2022.

The ABI recently published details of actions that could be taken to tackle motor insurance costs. These included making more data available for consumers to understand which vehicles are more expensive to insure.

Jonathan Fong, the ABI’s 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.”