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Ella Mower

Senior Content Writer
Published: 24/08/2023
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Despite losing customers, the company reported a 4% increase in profit compared to last year.

Motorists in the UK are paying more to insure their vehicles. This is according to the Association of British Insurers (ABI), which stated the current average premium for private comprehensive motor insurance rose to £511 in the three months to June 2023 – up 21% on the same period last year.

These rising average prices may go some way to explain why Admiral Group plc reported a loss of 380,000 motor insurance customers over the past year. However, despite losing customers, the UK insurer saw overall profits increase by 4% compared to this time last year, reaching £234 million before tax.

Why did the average price of car insurance rise?

Like many, the insurance industry is also feeling the pressure of sustained high inflation. The ABI reported vehicle repair costs rose by 33% to £1.5 billion over the year since the first quarter of 2022, the highest figure since it started collecting data in 2013, as a result of energy inflation and more expensive repairs.

Furthermore, it specified that labour costs increased up to 40%, while the cost of replacement parts for many popular cars rose between 12% and 21% over the past year.

All of this amounts to the average price paid by those renewing their cover increasing by £36 on the previous quarter to £471. Meanwhile, the average premium for a new policy rose by £21 to £566.

Mervyn Skeet, the ABI’s Director of General Insurance Policy, recognised that these are “tough times for many motorists and motor insurers alike”.

“We would urge anyone concerned about being able to afford their insurance to speak to their motor insurer to see what options might be available. And despite cost pressures, it can still pay to shop around to get the policy that best meets your needs at the most competitive price,” Skeet added.

Worried about the rising cost of car insurance?

Compare some of the best policies using our dedicated car insurance chart.

Each year, our team of impartial experts review the car insurance products available in the UK and assign Moneyfacts Annual Star Ratings to standout policies.

Will the price of car insurance continue to rise?

Within its 2023 Half Year Results, published on 16 August 2023, Admiral Group plc said it expected continued increases to the price of its motor insurance throughout the rest of the year.

Whether the price of car insurance will keep rising on average, however, depends on whether the rate of inflation continues to fall. If you’re worried about the cost of your motor insurance, consider getting in touch with your insurer or looking for another policy that best meets your needs at a more competitive price.


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