The average value of personal injury claims rose by 13% during 2020, motor insurers have said, in  explaining why premiums remained almost unchanged in a year when private motoring plummeted.

Average premiums for comprehensive car insurance fell by 1% last year to £465. The Association of British Insurers said it was the fourth consecutive year that premiums fell, but it came during a year in which the number of claims settled fell by 19%, as the pandemic resulted in fewer cars on the road.

Meanwhile, the ABI said that total payouts were 6% down, at £8.3bn - but the average settlement rose by 13% to £12,100. The insurers’ representative said that members had faced other costs during the lockdown and insisted that incoming PI reforms were still justified.

Laura Hughes, the ABI’s manager of general insurance, said: ‘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.’

The reduction in claims continued towards the end of 2020, with the ABI reporting a 13% decrease in claims settled from October to December.

Such a trend is supported by civil justice statistics published by the Ministry of Justice earlier this month. The number of personal injury claims fell by 10% to 24,000  in the final three months of 2020 compared with the same period in 2019.