- Increased cost of personal injury, vehicle repairs and vehicle theft claims in the third quarter.
- Changes to the Discount Rate needed to help ease cost pressures on motor insurance customers.
An increase in the costs of personal injury claims, vehicle repairs and theft claims led to insurers paying out £2.1 billion in the third quarter of 2017 according to figures published by the ABI today. This is the third most expensive quarter since ABI started collecting the data at the start of 2013.
In the third quarter of the year:
- The cost of personal injury claims, at £835 million, was up 6% on the previous quarter, with the average payout of £10,120 up 2% on the previous quarter.
- The vehicle repair bill, including third party claims and windscreen damage, was just over £1 billion, the highest quarterly figure on record, and up 16% on the same period last year. The average cost of repairing damaged vehicles of policyholders has jumped by 46% to £1,944 over the last four years since quarter 2, 2013. This is being driven by higher costs for imported parts due to the fall in the value of the pound, and the increasing complexity and technology of many vehicles, which means that some top of the range vehicles have more technology fitted than an aircraft.
- Theft claims continued to rise, costing £71 million up 25% on the same quarter last year. The number of claims, at 13,000, were at the highest level since quarter 2, 2013. The cost of the average claim for the theft of a vehicle, at £6,582, reached an all-time high.
According to Office of National Statistics figures, vehicle-related crime rose by 17% in the year ending June 2017. The rise in vehicle crime is being partly fuelled by the increasing use of high-tech devices enabling cars to be stolen without forcible entry.
Rob Cummings, Assistant Director, Head of Motor and Liability at the ABI, said:
“Increasing cost pressures continue to put the squeeze on motor insurance premiums, pushing up the average cost of cover to record levels and hitting young drivers particularly hard. Reforms to the Discount Rate cannot come soon enough. So it is vital that the Government pushes ahead without delay on its proposals, as well as implementing changes to the rules governing payouts for less serious soft tissue injuries like whiplash.”
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