Record repair costs of £1bn boost motor claims to £2bn in the second quarter
Motor insurers paid out a total of £2bn in claims in the second quarter, fuelled by £1bn vehicle repair bills and higher theft costs according to ABI data published today.
The average claim in the second quarter was £2,839 up 6% on the same period last year.
The £1bn bill for vehicle repairs, including third party claims and windscreen damage, was the highest quarterly figure on record, up 3% on the same quarter last year. The average cost of repairing damaged vehicles of policyholders, at £1,770, has risen by 33% over the last four years since the second quarter of 2013.
The ABI blamed increasingly complex technology in new cars and the weaker pound, which has increased the cost of imported spare parts.
Theft claims also rose to £68m in the second quarter, up 21% from the same quarter last year. The number of claims, at nearly 13,000, is at its highest quarterly level since early 2013. The rise has partly been fuelled by the increasing use of high-tech devices enabling car thieves to steal cars without forcible entry.
Rob Cummings, Head of Motor and Liability at the ABI, said: “Cost pressures continue to dominate the motor insurance market. Rising repair bills reflect increasing vehicle technology and complexity, but also the availability and cost of some spare parts sourced overseas. We need the best possible Brexit deal to help ensure availability of vehicle parts.
“These figures further highlight why the government needs to act to help relieve unnecessary industry costs. The recent Government announcement to introduce legislation to reform the Discount Rate should help. It is also important that the Government effectively implements their whiplash reforms, and that there are no further hikes in Insurance Premium Tax.”