According to figures published by the Association of British Insurers (ABI), the amount paid out by motor insurance companies in the UK in the second quarter of 2023 reached a record level. Whilst it is good to hear that insurers are meeting many claims they receive a knock on effect of more claims being paid out is a rise in the amount being charged for car insurance.
In the second quarter of this year the amount insurers paid out to meet claims for motoring accidents totalled £2.5 billion. In the same quarter in 20222 the amount paid out to meet such claims amounted to £2 billion. That is a rise of around 25%. We are sure that you will agree that is a huge increase. The number of motor insurance claims that were settled rose by 18% in the 12 months to the second quarter of 2023 with 592.000 settled claims.
It is interesting that the amount paid out for repairing vehicles rose to £1.5 billion in the second quarter of 2023 with that being a 46% increase when compared to the same quarter in 2022. This increase in part is due to things like more expensive car parts and the amount paid out for labour.
Many policyholders make use of a replacement car whilst their car is being repaired with the cost of such vehicles amounting to £157 million in the second quarter of 2023 compared to £103 million in the second quarter of 2022 – a rise of 52%.
The amount paid out by insurers relating to vehicles being stolen amounted to £196 million compared to £128 million in the same quarter last year – a rise of 53%.
Another interesting figure is that the amount paid out in meeting motor insurance claims exceeded the increase in the average amount being paid by motorists for such cover as premiums rose by 21% in the second quarter of 2023 when compared with the second quarter of 2022.
