Context
The Association of British Insurers (ABI) have released figures which show the average price paid for motor insurance has continued to rise. Costs are up 12% on the previous quarter (Q4 vs Q3 2023), driven by record increases in the cost to insurers to pay claims. This means motor cover was 25% more expensive on average across the whole of 2023 than in 2022.
Key points to note and next actions
ABI’s Director of General Insurance Policy, Mervyn Skeet said: “We’re acutely aware of the impact that rising motor insurance premiums continue to have on motorists. Rising repair costs and other factors outside of insurers’ control mean there is no single action that could bring down premiums. ABI are working with their members to understand what actions can be taken to help motorists manage costs. The cost of paying monthly (premium finance) is one of a number of topics that ABI continue to discuss with their 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.”
- Insurance Premium Tax (12%) currently adds £67 to the average motor premium.
- Prices changes quarter to quarter;
- 2022 Q1 > 2023 Q1: 15%
- 2022 Q2 > 2023 Q2: 21%
- 2022 Q3 > 2023 Q3: 29%
- 2022 Q4 > 2023 Q4: 34%