The number of motor insurance claims settled by insurers in 2020 fell by 19% according to figures published earlier today by the ABI (Association of British Insurers). This unsurprising fall reflected the Covid lockdowns during the year, which led to significantly fewer vehicle journeys. Total payouts also fell, but at a much lower rate. During 2020 the average personal injury payout rose 13% on the previous year to £12,100
During the same period, the average price paid for private comprehensive motor insurance remained at a four-year low. Throughout the pandemic, motor insurers have been providing a range of extra support and help to their customers.
The figures highlight that, in quarter four, 2020:
-The number of claims settled fell by 13% on the previous quarter to 468,000. The number of claims usually falls in this quarter with fewer vehicles on the roads over the Christmas break.
Overall, in 2020:
-The number of claims settled, at 2.1 million, fell by 19%. Total payouts, at £8.3 billion, reduced by 6% on the previous year. These figures reflect the impact of the national lockdowns with reduced road usage; current figures from Government show a 14% fall in road traffic in the year to June 2020.
-The overall average value of a claim paid was £4,000 up from £3,400 in 2019. This 17% rise on 2019 reflected rises in average personal injury and vehicle repair cost claims.
During 2020 the average price paid for private comprehensive motor insurance was £465, remaining at a four-year low.
BY MILES COMMENT
James Blackham, CEO and Co-Founder of UK’s leading pay-by-mile car insurance provider By Miles, says:
“The ABI data proves what we have long talked about – as a result of falling driving levels, insurance claims and payouts reduced significantly in 2020. Despite the vast reduction in claims due to changing habits, not all insurers have been quick enough to provide drivers with refunds. With total payouts falling by 6%, the data suggests that insurers have saved almost £530 million – and yet only 1 in 5 drivers have received a refund.
“Many areas of society and business are taking the opportunity to build back better post-Covid, and car insurance should be no different. If you’re driving less, you’re far less likely to make a claim, so it’s only fair that you should be paying less. The industry needs to welcome a more flexible model, with drivers paying for their services only when they use them. Current systems are too rigid and have left drivers out of pocket.
“This huge shift in driving habits is here to stay – so this is the perfect opportunity for the industry to step up and meet the needs of customers in 2021. Our own research suggests that drivers completed 550 million miles less a week since March 2020, with a driven commute no longer a feature of their daily lives. A fifth of these commuting miles, over 100 million, will not return to roads – as long-term remote working remains popular.
“If you drive less; you should pay less. It’s that simple.”