| Link(s): | Sustained cost pressures for motor insurers biting, but motor insurance remains competitive | ABI |
Context
The average price paid by motorists for their motor insurance has risen only marginally by 2% over the last year despite sustained rising cost pressures faced by insurers according to the ABI’s latest Motor Insurance Premium Tracker.
Key points to note
- The average premium paid in the 3rd quarter of 2022 for private motor insurance was £436, up 2% over the year since Q3 2021, and up 3% on Q2 this year.
- The average cost of repairing vehicle damage under a policyholder’s own motor policy jumped by 16% to just over £3,000 in the year to quarter 2, 2022. This reflects increasing vehicle sophistication, leading to more expensive repairs as well as rises in the costs of raw materials such as paint.
- The continued shortage in semiconductor microchips and global supply chain issues, made worse by the Russian invasion of Ukraine, have led to longer waiting times for many new vehicles and vehicle parts. This has contributed to a rise in the demand for secondhand cars, with Auto Trader reporting used car prices increasing by an average 30% in 2021.
Next actions
None – for information and awareness.