Claims cost increases surge ahead of premiums

ILC ARTICLE

2nd May 2024

New figures released by the Association of British Insurers (ABI) have revealed that the cost of claims rose eight per cent in the first three months of 2024 compared to a one per cent rise in premiums.

The ABI’s Motor Insurance Tracker found that the average cost of a motor claim rose to £4,800 in the first quarter, while average comprehensive car insurance policies are now £635.

These figures are based on data extracted from almost 28 million sold policies.

Looking at the longer-term trend, the ABI has reported that since 2017 claims costs have increased by 23% in real terms while policies are just £8 more expensive.

Mervyn Skeet, the ABI’s director of general insurance policy, said: “We understand that car insurance costs are putting pressure on household finances. These figures show how competitive the motor market is, with insurers absorbing significant cost rises but keeping prices relatively stable. Even though these figures demonstrate a slowdown in price increases, we won’t be taking our foot off the gas when it comes to our work on tackling the cost of cover.”