UK insurers paid a record £11.7 billion ($23.27 billion) in car insurance claims last year as increasing thefts and repair costs continued to dent the industry, according to the Association of British Insurers.

There was a 17% rise in payouts compared with 2023, and the average private motor insurer paid £4900 ($9744) per claim. More than 2.4 million motor claims were paid last year.

The final quarter brought an average payout of £5300 ($10,540) – a record high.  

Annual vehicle repair costs soared to £7.7 billion ($15.31 billion), up more than £1.5 billion ($2.98 billion) on 2023.  

The association says the record costs have driven a rise in premiums, with last year’s average hitting £622 ($1237) – about 15% higher than in 2023.  

The figures come a year after the ABI delivered its 10-point roadmap to manage insurance costs, including efforts to tackle fraud and theft and improve road safety.  

ABI general insurance policy head Mark Shepherd says the data “paints a difficult picture for drivers and the industry alike”.

“Through our 10-point roadmap, we’ve been working hard to help tackle the cost of motor insurance and we’ve seen progress in some areas, with average premiums having fallen from their peak,” Mr Shepherd said. “However, we recognise that the price of cover remains a strain on household finances while the industry faces significant cost pressures.”  

He says the industry is “doing all it can” and it is time for the government to take “necessary action to combat high claim costs”.

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