November 2018 Motor insurance pay-outs soar to record levels;

By November 21, 2018Uncategorized

ABI data shows that the cost of theft claims has surged by 32% to £271m in the first nine months of 2018.

Motor insurance pay-outs have reached record levels this year with more than £23m being paid every day, according to research by the Association of British Insurers (ABI).

In the first nine months of 2018, a total of £6.4bn was paid out to private motorists and in compensation to crash victims, highlighted the data.

This was an increase of 4% on the previous year.

Theft

The data on pay-outs, which cover theft, own vehicle and third-party property damage, as well as personal injury compensation, was collected from members of the trade body.

The data showed that the cost of theft claims rose by 32% compared to the same period in 2017, reaching £271m.

Repair costs were also a driving force behind the increase in motor insurance pay-outs. Standing at £3bn so far this year, it rose by 5% on the same period last year.

Compensation

ABI’s director general Huw Evans said: “Motor insurers are delivering when it matters, keeping Britain’s motorists on the road when things go wrong, and compensating those who suffer injury in road crashes.

“Despite rising claim costs, all drivers will appreciate the fact that the average price paid for motor insurance has been falling this year.

“This in part reflects the continued competitive market, and that some insurers may be reacting to the progress of the Civil Liability Bill that is proceeding through Parliament that will bring much-needed reforms to the personal injury compensation system.”

Recession

In response to the ABI figures Tony Newman, Allianz’s head of motor claims, noted that he wasn’t surprised by the rise in theft motor claims.

“It’s indisputable that both the cost to repair vehicles and car theft have risen sharply,” Newman said.

“Figures from the Office for National Statistics for England and Wales show car theft rates rose by 56% last year. Keyless vehicles are being stolen in less than 60 seconds often using devices bought over the internet.”

In addition, Allianz UK chief executive officer Jon Dye told Insurance Age earlier this month that recent prices from the insurer have reflected the current climate of claims inflation.

“We have seen a deterioration in the performance of theft. It is almost as if the economy has been in recession as theft and arson tick up when the economy is under pressure,” he continued.

“While Mark Carney might tell us we are not in recession we can see an increase in theft claims both in terms of the number of them and their cost.”