The average motor insurance premium in the UK fell by 2% in April to June compared to the first three months of the year, according to the latest data.
Drivers are now paying an average of £622 for motor insurance.
This is the first time the quarterly average premium has fallen in two years, the Association of British Insurers (ABI) said. It follows a 1% increase to premiums in the first quarter of this year.
Pressure on claims costs has eased this quarter, with the average claim paid remaining stable (+0.4%) after an 8% rise in Q1.
However, premiums are still 21% higher than in the second quarter of last year.
Over the last 12 months, insurers paid out £2.9bn in motor insurance claims — up 18% on the £2.5bn paid in the prior year. Repair costs are 28% higher, totalling £1.9bn.
Accounting firm EY estimates that for every £1 collected in motor insurance premiums in 2023, the industry paid out £1.13 in claims and expenses.
“After a very challenging period for insurers and customers alike, we’re encouraged to see an easing of increases to motor insurance premiums as recent claims costs stabilise,” said Mervyn Skeet, director of General Insurance Policy at the ABI. “While this is good news, we need to continue our work focusing on claims costs, for the good of consumers. It remains a top priority for us and our member insurers.”
