6 July 2023

Energy pressures: A driver of motor claims inflation

By Road Runner

In recent years, the insurance industry has been heavily impacted by claims inflation and motor insurance is no exception to this. In 2021, motor claims pay out inflation increased by over six percent, taking the average cost per claim to £5,3491.

Many industries in the UK are being challenged by ever increasing energy prices and the motor sector is certainly one of them, impacting every stage of a vehicle’s life. This includes manufacturing and day-to-day running costs, along with the expenses and outgoings associated with maintaining and repairing the vehicle.

The industry’s collective energy bill has risen by more than £100 million over the last 12 months to at least £300 million2 and it is now the single biggest concern for UK automotive manufacturers.

The UK automotive manufacturing industry is facing some of the highest electricity costs in Europe3 and is requesting extra support for businesses facing high energy costs whilst making the transition to Net Zero.

How does this affect my insurance?

As wholesale gas and energy supply is becoming a more precious and valuable commodity, repair centres and manufacturers are impacted, with many having to pass costs onto customers, further increasing inflation and costs of claims.

At Aston Lark, we recognise that there’s a wide variety of factors currently impacting claims inflation. Many of these factors are out of our control, but we’re committed to supporting you through it all. If you have any questions about your insurance with us, contact us today.