The typical worth paid for complete motor insurance coverage within the UK was a few third (33%) or £157 larger within the first quarter of this 12 months than a 12 months earlier, in line with figures from the Affiliation of British Insurers (ABI).
Based mostly on evaluation of insurance policies offered, the everyday worth paid within the first quarter of 2024 was £635, marking a 1% improve on the earlier quarter, the ABI mentioned.
Within the first quarter of 2023, the typical premium paid for personal complete motor insurance coverage was £478.
The ABI mentioned the 1% quarterly improve indicated an easing of the rises seen in 2023.
It mentioned insurers had been persevering with to soak up rising prices, with the typical declare paid rising 8% to succeed in a file of £4,800 over the identical interval.
Claims inflation has but to stabilise, with the prices of repairs, substitute autos and theft all rising, the ABI mentioned.
The ABI’s motor insurance coverage tracker analyses practically 28m insurance policies offered a 12 months, and the claims paid towards insurance policies.
The affiliation has beforehand cited prices resembling vitality inflation, rising costs for paint and different uncooked supplies, rising courtesy-car prices and the elevated value of secondhand vehicles as including to general value pressures.
Over the long run, motor insurance coverage has tracked very near inflation, the affiliation mentioned.
In actual phrases, costs are £8 or 1.3% larger when put next with a peak on the finish of 2017, in line with the ABI. That is partly as a result of costs fell considerably through the coronavirus pandemic, it mentioned.
It added that 2023 was a “tough 12 months” for motor insurance coverage margins, and that prices for insurers to pay claims have elevated by 23% in actual phrases since 2017.
Mervyn Skeet, the ABI’s director of basic insurance coverage coverage, mentioned: “We perceive that automobile insurance coverage prices are placing stress on family funds. These figures present how aggressive the motor market is, with insurers absorbing important value rises however maintaining costs comparatively secure.
“Although these figures reveal a slowdown in worth will increase, we gained’t be taking our foot off the gasoline on the subject of our work on tackling the price of cowl.”
In February the ABI set out steps that the business is taking to fight the rise in the price of motor insurance coverage. Final week it introduced that its members had agreed measures geared toward serving to handle the prices for individuals paying for insurance coverage on a month-to-month foundation.
The affiliation mentioned it really useful that folks scuffling with the price of their cowl communicate to their insurer.
Earlier in April, the Treasury choose committee member Dame Angela Eagle informed a listening to on insurance coverage: “My constituents and many individuals who write to the committee really feel that insurance coverage is changing into extra of a rip-off.
“As a result of the worth goes up, it’s tougher to make a declare; individuals, after they do make a declare, usually have to attend a really very long time or aren’t handled very pretty.
“And that’s significantly the case for insurance coverage that’s obligatory, resembling driving insurance coverage.”
In one other Treasury choose committee session later that day, Charlotte Clark, the ABI’s director of regulation, mentioned a part of the explanation that rises in motor insurance coverage may look so important was that “it’s coming off the again of the pandemic, the place motor insurance coverage specifically was decreased fairly considerably, as a result of the dangers of being in a automobile accident once you’re at dwelling are fairly low”.
Matt Brewis, the director of insurance coverage on the Monetary Conduct Authority, informed the committee the regulator had been taking a look at proof of how inflation had affected the motor sector.
He mentioned the regulator was assembly with worth comparability web sites, brokers and customers “to know the issues of customers and the place they’re seeing points”.