Record Motor Insurance Claims Reached £11.7 Billion in 2024, Reveals Association of British Insurers
The Association of British Insurers reports a significant increase in claims and premiums, attributing factors to rising theft and repair costs.
The Association of British Insurers (ABI) announced that motor insurers in the UK paid out a record £11.7 billion in car insurance claims during 2024. The data indicates that the average cost of motor insurance coverage rose by £78, bringing the total average premium to £622.
This figure represents a 15% increase compared to 2023.
According to the ABI, the rise in claims payouts is influenced by escalating theft and repair costs, which are affecting the overall premiums that drivers face.
However, there are indications that insurance costs for motorists have begun to decrease in recent months.
The ABI reports that the average amount paid by drivers for cover in the final quarter of 2024 was 2%, or £14, lower than at the beginning of the year, with a typical premium of £621, down from £635 recorded in the first quarter.
The ABI's data highlights a 17% increase in total claims payouts for privately-owned cars in 2024 compared to the previous year, marking the highest claim amount since the organization began tracking this data in 2013. Insurance providers dealt with approximately 2.4 million motor insurance claims throughout the year, with an average payout of about £4,900 per claim.
In the last quarter of 2024, the average claim amount escalated to a record high of £5,300.
The total expenses for vehicle repairs reached £1.9 billion in the fourth quarter alone, contributing to an annual total of £7.7 billion — a £1.5 billion increase from the 2023 figure.
In response to these ongoing challenges, the ABI has introduced a 'road map' outlining potential measures that the insurance industry and the government can implement to mitigate high insurance costs.
Mark Shepherd, head of general insurance policy at the ABI, indicated the importance of addressing skills shortages and capacity issues within the vehicle repair sector and highlighted the need for improvements in the UK’s road infrastructure to help alleviate these costs.
Shepherd commented on the overall situation, stating, "Our latest data paints a difficult picture for drivers and the industry alike.
Through our 10-point road map, 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."
Additionally, Shepherd emphasized the necessity of maintaining the current insurance premium tax, which directly impacts consumer pricing, and expressed the ABI’s commitment to collaborate with the government and other stakeholders to support both drivers and tackle claims costs.
This figure represents a 15% increase compared to 2023.
According to the ABI, the rise in claims payouts is influenced by escalating theft and repair costs, which are affecting the overall premiums that drivers face.
However, there are indications that insurance costs for motorists have begun to decrease in recent months.
The ABI reports that the average amount paid by drivers for cover in the final quarter of 2024 was 2%, or £14, lower than at the beginning of the year, with a typical premium of £621, down from £635 recorded in the first quarter.
The ABI's data highlights a 17% increase in total claims payouts for privately-owned cars in 2024 compared to the previous year, marking the highest claim amount since the organization began tracking this data in 2013. Insurance providers dealt with approximately 2.4 million motor insurance claims throughout the year, with an average payout of about £4,900 per claim.
In the last quarter of 2024, the average claim amount escalated to a record high of £5,300.
The total expenses for vehicle repairs reached £1.9 billion in the fourth quarter alone, contributing to an annual total of £7.7 billion — a £1.5 billion increase from the 2023 figure.
In response to these ongoing challenges, the ABI has introduced a 'road map' outlining potential measures that the insurance industry and the government can implement to mitigate high insurance costs.
Mark Shepherd, head of general insurance policy at the ABI, indicated the importance of addressing skills shortages and capacity issues within the vehicle repair sector and highlighted the need for improvements in the UK’s road infrastructure to help alleviate these costs.
Shepherd commented on the overall situation, stating, "Our latest data paints a difficult picture for drivers and the industry alike.
Through our 10-point road map, 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."
Additionally, Shepherd emphasized the necessity of maintaining the current insurance premium tax, which directly impacts consumer pricing, and expressed the ABI’s commitment to collaborate with the government and other stakeholders to support both drivers and tackle claims costs.
