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UK car insurance prices are set to rise for at least another two years, according to a report today from the consultancy Oxbow Partners.
The price for Brits to insure their motors is expected to rise 14 per cent in 2023 and will not flatten until 2025, Oxbows' report finds.
It comes as rising inflation, car repair costs and additional cost pressures including an increase in the price of second hand vehicles, have pushed big firms such as Aviva and Admiral to hike up the cost of cover.
Insurance groups have been criticised for the price rises amid the ongoing cost of living, with claims that it could deter customers from getting insured entirely.
Last week, insurance bosses from firms including Admiral, Aviva argued that that rising costs were not down to "profiteering" of any kind, but were instead down to "significant cost pressures."
In May, the Association of British Insurers (ABI) announced that prices were at their highest level since 2019, stating that insurers continued to "face higher costs."
"The price of certain raw materials and energy costs are rising at rates well above general inflation, and these costs are becoming increasingly challenging to absorb," the ABI argued.
Paul D'Ath, head of market intelligence at Oxbow, said that the price rise was "driven by high levels of claims inflation in 2022 which has continued into 2023," but noted that this inflation could "ease in the second half of this year, which should help to ease motor insurance prices for customers."
D'Ath told City A.M. that it was likely that customers would "opt for lower-coverage products," in response to rising prices, but that concerns people would cancel their motor insurance altogether were unlikely.
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