Motor insurers in the UK, paid out £2.5 billion in motor claims in the second quarter of 2023, up 29% on the £2 billion paid in the same quarter in 2022, according to latest data published by the Association of British Insurers. This was the highest quarterly figure since data collection started in 2013. 

In total, insurers paid out £2.5 billon in all motor insurance claims, covering theft, vehicle repairs, replacement vehicles and personal injury. The overall number of claims settled, at 592,000, was up 18% on Q2 2022.  

The costs of vehicle repairs leapt by 46% over Q2 2022 to £1.5 billion, the highest figure since ABI started collecting this data. This reflects rising costs for insurers, including energy inflation, labour rates and more expensive repairs. The costs of providing replacement cars jumped 52% from £103 million to £157 million, reflecting longer average repair times.  

Payouts for vehicle theft, at £196 million, increased by 53%, while insurers paid out £602 million in personal injury claims in the second quarter of the year. 

ABI say claim payouts over the year have risen at a faster rate than increases in the average motor insurance premium paid. 

The figures do reflect the reality on the ground in the accident repair sector in both the UK and Ireland. Repair costs and repair times are on the rise, mainly down to the increased complexity of repairs, including the need to recalibrate ADAS equipment. Reduced repair capacity, due mainly to the shortage of skilled labour, is also causing longer repair lead times, as are delay in the supply of certain parts. 

Inevitably, premiums will rise in line with repair costs, although the point should not be forgotten that actual cost of vehicle repair still only accounts for a small percentage of total premium costs.