| Link(s): | Above inflation costs for insurers continue to put pressure on motor insurance premiums | ABI |
Context
According to the ABI’s latest Motor Insurance Premium Tracker, published today, the average price paid for motor insurance rose by 2% in the first quarter of this year over the previous quarter. The rise reflects above inflation cost pressures motor insurers continue to face, such as higher raw material costs for vehicle repairs.
Key points to note
According to the latest Tracker, in the first quarter of this year:
- The overall average premium paid for private comprehensive motor insurance was £478 up 2% on the previous quarter. The current average premium is 16% higher compared to Q1 2022, and is at its highest since Q4 2019, when it was £483.
- The average price paid by motorists renewing their cover rose by £8 to £436 while the average premium for a new policy was up £14 to £545.
Like many other sectors, insurers continue to face higher costs. The price of certain raw materials and energy costs are rising at rates well above general inflation, and these costs are becoming increasingly challenging for insurers to absorb. Examples of increasing cost pressures cited by some ABI members include:
- Energy inflation adding to each repair.
- Average paint and material costs have increased by nearly 16%.
- Courtesy car costs to repairers are increasing at around 30%.
- In addition, the average price of second-hand cars has jumped by 30% in three years (source: Auto Trader).
Next actions
None – for information and awareness.