A report by the Association of British Insurers (ABI) has shown that the number of motor insurance claims settled by insurers in 2020 fell by 19% due to COVID-19.

Although this fall was predicted, it reflects the effects of lockdown restrictions throughout the year which led to significantly fewer vehicle journeys.

As a result, the 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 total payouts, finished at £8.3 billion, which was reduced by 6% on the previous year.

The report also shows 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.

Laura Hughes, ABI’s Manager, General Insurance, said: “The pandemic has forced many motorists to change their driving habits. Predictably, lockdowns have led to far fewer vehicles on the roads, reflected in the fall in the number of motor claims.

“During the pandemic insurers have given additional support to their customers, including options for reduced mileage and help for those struggling to pay their premiums by instalments. It is good to see that throughout an uncertain year, motorists continued to get the best deals from a competitive motor insurance market.

“As we edge back to some form of normality, cost pressures remain, such as increasing vehicle repair costs, reflecting ever more complex vehicle technology. With the average personal injury claim rising last year, the advent of the whiplash claims portal in May should help control whiplash costs, while ensuring that proportionate compensation is paid to genuinely injured claimants”.

Source: Reinsurancenews except headline.