The Association of British Insurers said the average price paid for motor insurance in Q4 of 2023 was up by 12% on the previous quarter and by 25% for the year. According to the ABI’s Motor Insurance Premium Tracker, the average premium paid for private motor insurance in Q4 was £627.

Mervyn Skeet (pictured), the director of general insurance policy at the ABI, said: “We’re acutely aware of the impact that rising motor insurance premiums continue to have on motorists. Rising repair costs and other factors outside of insurers’ control mean there is no single action that could bring down premiums. However, we are determined to do all we can to put the brake on.

“We are working with our members to understand what actions can be taken to help motorists manage costs. The cost of paying monthly (premium finance) is one of a number of topics we continue to discuss with our members and the Financial Conduct Authority (FCA).

“We’ve also been very clear, and continue to underline, that cutting Insurance Premium Tax would provide immediate relief for stretched consumers. We will be saying more, as we can, on other steps we will take in the coming weeks.”