Motor insurance claims fell by 19% in 2020 as drivers were kept at home during lockdown, but premiums were largely unchanged according to data from the Association of British Insurers.
Total payouts fell by 6% to £8.3bn reflecting a 14% fall in road traffic in the year to June 2020 according to the government, though the average payout rose by 17% to £4,000 with higher 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.”
Hughes added that insurers had introduced numerous support measures for customers during the pandemic including refunds, adjustments for fewer miles driven, extensions of cover to driving to and from work and those helping self-isolating or deemed vulnerable to get essential medicines and supplies.
Shares in Admiral PLC (LON:ADM), which gave drivers a £25 refund in April last year, were flat at 2,934p.