’Motor insurers are working hard to keep premiums competitive and affordable for customers, despite ongoing high claims costs,’ says director of general insurance
Motor insurers paid out a record £3.2bn during the second quarter of 2026, according to the ABI.
The data, published today (30 July 2026), showed the total was 5% higher than the previous quarter and 7% above the level recorded during the same period in 2025.
The ABI said average claim payouts increased to £4,900 during the quarter, up 4% compared with the first three months of the year.
The trade body attributed the rise, in part, to increasing vehicle repair costs, as modern vehicles become more reliant on advanced technologies such as cameras, sensors and driver assistance systems.
Windscreen claims experienced one of the sharpest increases during the quarter, with the average repair bill rising 7% to £283.
Motor premiums
Despite the increase in claims costs, motor insurance premiums remained relatively stable.
Read: Vehicle value swings of up to £7,000 could leave policyholders facing insurance gap
Read: Cover costs fall for young drivers but monthly mark-ups still biting
Explore more motor-related content here, or discover other news stories here
The ABI reported that the average premium paid rose by £6 during the second quarter to £566, representing a 1% increase compared with the previous quarter.
However, when adjusted for inflation, the average premium remained £14 lower than the equivalent period in 2025.
Chris Bose, director of general insurance and international policy at the ABI, said: “Motor insurers are working hard to keep premiums competitive and affordable for customers, despite ongoing high claims costs.
“The Motor Insurance Taskforce provides a real opportunity for the new government to work with insurers and the automotive sector on this, to help improve affordability for drivers further.”
Bose added that government support would be needed to help address some of the underlying drivers of claims inflation.
He said: “By increasing repair sector skills and improving parts availability, policymakers can help the sector keep pace with vehicle innovation and support a more resilient market.
“We stand ready to work with government and industry to help deliver these reforms.”
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
He took up the position of deputy news editor at Insurance Times in March 2023, before being promoted to his current role in May 2024.View full Profile
No comments yet