An increase in the costs of personal injury claims, vehicle repairs and theft claims led to insurers paying out £2.1 billion in Q3 2017, the Association of British Insurers (ABI) has reported.
Increases across personal injury claims, vehicle repairs and theft claims were blamed for what was the third most expensive quarter since the ABI started collecting the data at the start of 2013.
The cost of personal injury claims, at £835 million, was up 6% on the previous quarter, with the average payout of £10,120 up 2%.
The vehicle repair bill, including third-party claims and windscreen damage, was just over £1 billion, the highest quarterly figure on record, and up 16% on the same period last year.
The average cost of repairing damaged vehicles of policyholders has jumped by 46% to £1,944 over the last four years since Q2 2013.
According to the ABI, this is being driven by higher costs for imported parts due to the fall in the value of the pound, and the increasing complexity and technology of many vehicles.
Theft claims continued to rise, costing £71 million and up 25% on the same quarter last year. The number of claims, at 13,000, were at the highest level since Q2 2013. The cost of the average claim for the theft of a vehicle, at £6,582, reached an all-time high.
According to Office of National Statistics figures, vehicle-related crime rose by 17% in the year ending June 2017. The rise in vehicle crime is being partly fuelled by the increasing use of high-tech devices enabling cars to be stolen without forcible entry.
Rob Cummings, assistant director and head of motor and liability at the ABI, said: “Increasing cost pressures continue to put the squeeze on motor insurance premiums, pushing up the average cost of cover to record levels and hitting young drivers particularly hard.”
“Reforms to the discount rate cannot come soon enough. So it is vital that the government pushes ahead without delay on its proposals, as well as implementing changes to the rules governing payouts for less serious soft tissue injuries like whiplash.”