Here’s What’s Driving the Latest Trends in Motor Fleet Insurance

Motor insurance claims continue to present a challenging landscape for organisations - thanks to a combination of inflationary pressures, supply chain disruption and evolving vehicle technology. While the growing adoption of electric vehicles (EVs) brings environmental benefits and is increasingly central to many motor fleet strategies, the change has introduced higher average repair costs. These dynamics, alongside broader economic and market conditions, are shaping the motor claims environment in ways that are having a direct impact on businesses.

Rising Claims Costs Impact Fleet Insurance Premiums

Rising claims costs – particularly in the £100,000 - £750,000 loss bracket – are feeding directly into fleet insurance market conditions and premiums. While other lines of commercial insurance are softening, the motor market is marked by a more constrained underwriting environment where premium relief is harder to achieve compared to liability or property lines. Understanding why the fleet market is behaving differently is key to anticipating renewal outcomes and managing expectations.

Critical areas to consider are the frequency and severity of claims; fraud and exaggerated claims; EVs and alternative fuels; automation and Advanced Driver Assistance System (ADAS); climate change and extreme weather; and changes to the Highway Code.

Frequency and Severity of Claims

The Association of British Insurers (ABI) reported that UK motor insurers paid out a record £11.7 billion in claims in 2024, a 17% increase from the previous year. The average claim cost rose to £5,300 in Q4 2024, driven by higher repair costs, increased vehicle thefts and prolonged vehicle off-road (VOR) times.

The ABI also reported that repair expenses totalled £7.7 billion for the year, with the average theft claim reaching £11,200 in Q4 2024. Rising complexity in vehicle construction (e.g. ADAS sensors and vehicle electrification) has made repairs more expensive and time-consuming.

In the personal injury space, the Compensation Recovery Unit (CRU) reported a 46% reduction in motor personal injury claims since 2019. However, only 13% of claims received in the Official Injury Claim (OIC) Portal were unrepresented. The average claim time from First Notification of Loss (FNOL) to settlement has decreased to 350 days, down from 420 days in 2023 – yet this still represents a lengthy lifecycle for organisations to manage.

What Your Business Should Consider

• Review claims frequency and severity data to identify specific vehicle categories, incident types or routes where claims costs are increasing.
• Ensure claims handling processes capture relevant evidence to challenge exaggerated or inflated claims, especially in personal injury. Build dynamic dashboards to visualise claims trends, hotspots and outliers across your fleet.
• Have robust internal protocols for day one reporting to aid third-party capture and reduce cost leakage.
• Map and monitor claims lifecycles. Identify outliers that exceed average durations or appear to involve excessive costs. Ensure service level agreements (SLAs) are met and that you’re achieving value from your claims-handlers.
• Leverage your telematics data to monitor inflationary causes, such as repair cost increases and replacement part delays, to understand their impact on future renewals. 

Fraud and Exaggerated Claims

Organised crime rings accounted for 40% of motor insurance fraud in 2024, up from 25% in 2023. Common fraud types include staged accidents, non-existent injuries (29% of cases), cash-for-crash incidents (11%) and ghost-broking scams (10%).

Sophisticated criminal networks target commercial vehicles due to the perceived higher limits and complexity of fleet claims. With mixed injuries, vehicle write-offs and exaggerated hire car charges, commercial fleets are particularly exposed.

What Your Business Should Consider

• Implement internal fraud detection procedures that are defensible and aligned with market best practices. Train staff to identify common red flags.
• Encourage telematics, dashcam usage and incident checklists for evidence-gathering.
• Conduct regular audits to detect patterns across drivers, locations or claims-handlers that may signal suspicious activity. Work with fraud-specialist legal and adjuster partners to escalate and challenge fraudulent activity.
• Understand which claims are being referred for fraud screening by your insurer or third-party administrator.

EVs and Alternative Fuels

EV adoption in commercial fleets is accelerating, but the risk profile differs significantly from internal combustion engine vehicles. EV warranty claims are 30–50% higher. Batteries – typically costing £8,000–£12,000 – are often non-repairable. Repair times are on average 12 weeks longer, with a shortage of qualified EV technicians driving VOR increases. EVs also pose new fire, safety and storage risks. Specialist repair centres are unevenly distributed, potentially increasing transport costs and downtime for certain geographies.

What Your Business Should Consider

• Assess the proportion of EVs in your fleet and identify whether current insurance policies reflect the true replacement and repair cost exposures.
• Ensure drivers receive EV-specific training, including safe charging, fault protocols and emergency response.
• Evaluate whether your repair partners have the certified capability to handle high-voltage vehicle repairs.
• Consider battery lifecycle risk and salvage implications. Ensure insurer alignment on vehicles off road (VOR) cost control and expectations.

Automation and ADAS

The Automated Vehicles Act 2024 has accelerated the regulatory framework for autonomous driving in the UK, with fully autonomous vehicle deployment expected during 2026. Many fleets are already using Level 2/3 ADAS systems (e.g. lane-keeping and auto-braking), which change the liability dynamics in the event of a crash.

Sensor miscalibration post-repair and software faults introduce both cyber risk and new repair considerations. As automation increases, businesses must understand the split in liability between human driver and software.

What Your Business Should Consider

• Review how ADAS-equipped vehicles are documented, calibrated and tested post-repair.
• Understand the legal implications of incidents involving autonomous functionality.
• Maintain incident logs of how technology behaved during an event to assist with liability defence.
• Ensure cyber coverage includes vehicle system hacking or malfunction scenarios.
• Review policy wordings to ensure autonomous vehicle usage is covered effectively.

Climate Change and Extreme Weather

Floods and high winds are causing more damage to vehicles. Many commercial fleets do not have formal weather protocols, exposing vehicles to unnecessary risk. Aon is seeing increased catastrophe loss activity across its UK motor book, particularly for logistics and utility fleets with centralised depots in vulnerable zones.

What Your Business Should Consider

• Review depot and overnight parking locations for flood zone risk or wind exposure. Location-based flood risk mapping can help you reassess vehicle deployment strategies.
• Assess business continuity plans for vehicle unavailability due to weather events and improve severe weather readiness and resilience planning.
• Track near-miss weather alerts and create driver protocols for adverse weather conditions.

Highway Code Changes

The Highway Code now enshrines a Hierarchy of Road Users, prioritising pedestrians and cyclists. This increases liability risks for commercial drivers, particularly in urban and last-mile delivery settings.

What Your Business Should Consider

• Ensure drivers are trained on the updated Highway Code rules and the expectations of liability.
• Understand how courts and insurers are interpreting these changes in recent claims settlements and coordinate with your insurer or solicitor on defensibility strategies.

How Aon Helps Leaders Make Better Decisions

At Aon, we work with clients to navigate the complexities of the current motor insurance market. Our role goes beyond insurance placement – we help insureds understand the drivers of claims inflation, including specific challenges associated with EVs, and translate this into actionable strategies; offering tailored risk solutions, analytics and expert claims support to reduce costs and improve outcomes.

We support clients with:

• Data-driven insights– analysing claims trends to identify emerging risk factors and areas for intervention.
• Risk Management solutions– helping design and implement fleet risk programmes, from telematics and driver behaviour initiatives to EV repair readiness.
• Market advocacy – positioning clients’ risk profiles with insurers to secure the most competitive terms in a market where premiums remain under pressure)

By combining technical expertise, market intelligence and tailored risk management support, we help insureds not only manage rising claims costs but also improve their overall resilience in a rapidly evolving fleet environment.

For advice on your specific policies, wordings or claims considerations, please speak with your Aon advisor, who will be happy to walk through what this may mean for your programme or organisation.

Sources

1. Association of British Insurers (ABI) – 2024 Motor Claims Statistics

2.UK Compensation Recovery Unit (CRU) – Claims Data 2023–2024

3.Official Injury Claim (OIC) – Portal Statistics 2024

4.Department for Transport – EV Infrastructure Update 2024

5.Automated and Electric Vehicles Act 2024 – Summary