Insurance inflation reaches eight per cent

ILC ARTICLE

6th February 2023

The ABI has revealed that average motor insurance premiums rose by eight per cent in the fourth quarter of 2022.

Its latest Motor Insurance Premium Tracker found that average premiums increased to £470, which is seven per cent higher than they were in the same period of 2021.

The ABI has attributed insurance inflation to greater cost pressures among ABI members, which include a £71.75 rise in repairs due to energy inflation, a 16% increase in paint and material costs, and parts delays which are affecting 40% of all jobs. Further, courtesy car costs have grown by 30% and the average price of second-hand cars has swelled by 19%.

Jonathan Fong, Senior Policy Adviser, General Insurance, said, “Every motorist wants the best insurance deal, especially when coping with cost of living pressures, and insurers continue to do all they can to keep motor insurance as competitively priced as possible. Yet, like many other sectors, insurers continue to face higher costs, such as more expensive raw materials, which are becoming increasingly challenging to absorb.”