The Association of British Insurers (ABI) has released its latest Motor Insurance Premium Tracker, which shows an increase in the average premium paid for private motor insurance in the fourth quarter of 2023.
In Q4, the average price paid for motor insurance in the UK stood at £627. The amount recorded in Q3 was £562; in Q4 2022, the average premium was £470. On a full-year basis, the average for 2023 (£543) was 25% higher compared to 2022’s £434.
“We’re acutely aware of the impact that rising motor insurance premiums continue to have on motorists,” ABI general insurance policy director Mervyn Skeet said in a release. “Rising repair costs and other factors outside of insurers’ control mean there is no single action that could bring down premiums. However, we are determined to do all we can to put the brake on.”
According to the ABI, repair costs jumped 32% in the third quarter, amounting to £1.6 billion out of the total £2.54 billion in claims costs. Like-for-like figures for Q4 are yet to be finalised.
While it was noted that insurers are spending more on claims and costs than they are collecting in premiums, the trade body offered assurances that the focus is on supporting policyholders.
“We are working with our members to understand what actions can be taken to help motorists manage costs,” Skeet said. “The cost of paying monthly (premium finance) is one of a number of topics we continue to discuss with our members and the Financial Conduct Authority.
“We’ve also been very clear, and continue to underline, that cutting Insurance Premium Tax would provide immediate relief for stretched consumers. We will be saying more, as we can, on other steps we will take in the coming weeks.”
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