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ARTICLE · 18 SEPTEMBER 2025

A Spotlight On Motor Insurance Claims Costs

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The analysis finds that over 44 million policies were sold in the UK in 2024 with total premiums of over £20bn.

United KingdomInsurance
Kay Chand
Kay Chand
Sherina Lewis
Sherina Lewis

The Financial Conduct Authority (FCA) published its analysis on motor insurance claims in July 2025.

The analysis finds that over 44 million policies were sold in the UK in 2024 with total premiums of over £20bn.

However premiums increased significantly between 2022 and 2024 (although data collected by the ABI shows a slightly improved picture with average premiums falling by 2% in Q1 and Q2 of 2024).

Based on "data from 12 insurers representing over 50% of the UK private motor insurance market, increases in motor insurance premiums between 2022 and H1 2024 are largely due to increases in claims costs."

Key contributors to claims costs

With many insurers turning away from the motor sector altogether or changing their underwriting approach, the FCA analysis identifies several areas contributing to the cost of claims and therefore increased premiums for policyholders. A high level overview of these is set out below:

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