Motor insurance payouts reach record high in Q3 2023

Motor insurance payouts jumped by 21% during Q3 2023 to £2.54bn – the highest quarterly figure since records began in 2013.

That was according to the ABI, which revealed yesterday (29 November 2023) that insurers paid out the equivalent of £4,821 and every minute during the quarter.

A total of 570,000 claims were also settled, an increase of 5% compared to the same period in 2022.

“These figures highlight how motor insurers deliver when motorists need them the most,” Mervyn Skeet, the ABI’s director of general insurance policy,” said.

“When the worst happens, they keep the UK moving.”

Higher costs

These figures come at a time when costs for insurers are on the rise due to economic headwinds such as inflation.

According to the ABI, the cost of vehicle repairs jumped 32% to a quarterly record £1.6bn, with some insurers having reported price increases of 16% for materials and 15% for labour during Q3 2023.

The cost of providing replacement cars while vehicles were being repaired also jumped 47% to £160m, compared to £108m paid in Q3 2022.

Meanwhile, payouts for vehicle theft rose from £132m to £178m year-on-year.

Such increases has meant premium rises for consumers – according to ABI data earlier this month (8 November 2023), the average price paid for motor insurance stood at £561.

“Significant and sustained cost pressures faced by insurers, such as a 32% rise in repair costs over the last year, have impacted on the cost of cover,” Skeet added.

“Despite this, insurers continue to do all they can to ensure competitively priced motor insurance.

“These continue to be tough times for many families facing higher cost of living bills and anyone concerned about being able to afford their insurance should speak to their motor insurer to see what options might be available.

“And it can still pay to shop around to get the policy that best meets your needs at the most competitive price.”