It’s been nearly a year since the ABI set out our 10-Point Roadmap to tackle the cost of motor insurance. It’s a topic that has remained a high priority for us and our members. It’s also remained high on the agenda for customers.
Driving isn’t a luxury - it’s essential for millions who need their cars to work, commute, and care for loved ones. With third party liability cover a legal requirement, we continue to work hard on the areas set out in our plan. This week we published an update on our actions, alongside our latest data on the cost of claims and premiums.
The figures tell a challenging story: a record £11.7 billion was paid out in car insurance claims across 2024 - 17% higher than the previous year.
Readers will understand what that has meant for premiums. The annual average cost of cover in 2024 was £622 – 2% lower than prices paid in the first quarter of the year but 15% higher than 2023.
We recognise our role in explaining these cost pressures to the media, governments, and customers. However, with claims costs remaining high, the conversation needs to shift towards addressing the underlying factors.
Premiums respond to claims costs – this is how our world-leading insurance market functions. Our members operate in a competitive market where they want as many customers as possible to find the cover they need at a price they can afford. That is every insurer’s aim. But it has to be balanced alongside fiscal and regulatory duties. Firms need to support customers and responsibly run their business, contributing to the economy by delivering returns for investors and shareholders as they do so.
The industry is taking action. We’ve partnered with the National Vehicle Crime Intelligence Service and launched the Insurance Fraud Charter with the Home Office. Our members have committed to premium finance principles to support transparency and affordability. We continue to support the development of automated vehicle technologies that have the potential to improve road safety.
But the most significant cost drivers lie beyond insurers’ direct control. The UK faces a critical shortage of vehicle repair technicians just as electric vehicle adoption reaches record levels.
Vehicle theft and fraud continue to drive up claims costs. Road safety remains a persistent challenge, particularly for novice drivers.
These issues require coordinated action. We need government investment in technical education to train tomorrow’s repair specialists. We need a sharper focus on combating vehicle theft and uninsured driving. We need infrastructure improvements that reduce accident risks on our roads and better support for novice drivers so that they can build their experience safely.
The UK government’s motor taskforce provides a timely opportunity. By bringing together insurers, vehicle manufacturers, supply chain networks and policymakers, we can develop practical solutions that benefit UK motorists. The insurance industry stands ready – let’s work together to bring down costs for drivers.