With 2024 now behind us, insurers have their sights set firmly on what 2025 will bring for their motor claims supply chains, repair partnerships, and policyholder expectations.
With EVs firmly entering the mainstream, repair capacity challenges easing, and premium prices stabilising, the year ahead will likely bring new challenges, and equally opportunities for insurers and their partners to navigate.
Activate Group works with some of the UK’s best-known insurers, fleets, and repairers to deliver technology-driven, end-to-end accident management solutions.
Here, we reflect on some of the key trends the industry saw in 2024, and lay out our projections for what the next 12 months will bring…
Reflecting on 2024 in Motor Claims
“2024 was a year of both recovery and adaptation for the motor claims industry. While claims inflation continued to challenge insurers, driving up repair costs and squeezing margins, we also saw a rebound in repair capacity, which reignited a significant focus on technological and regulatory adjustments within insurers’ preferred networks.
Both insurers and their supply chains worked hard to align with Consumer Duty requirements, and adapt to the increasing presence of, and consumer demand for electric vehicles, balancing these priorities with robust cost control and customer-centric processes.
As we enter 2025, the focus must remain on managing these pressures while innovating to meet the evolving needs of policyholders and staying competitive in an increasingly dynamic market.”
Adrian Furness, Managing Director, Motor Repair Network
Easing of repair capacity challenges
After facing almost three years of high demand, and limited repair slots to accommodate, 2024 brought a resurgence of bodyshop capacity in previously overstretched regions.
Significant growth amongst repair groups, coupled with a gradual fall in claims volumes, have provided more availability for insurers, and enabled them to take a more strategic approach to repair partnerships.
According to Trend Tracker, repair demand has now fallen to its lowest levels since 2021, standing at an estimated 1.67 million repair estimates in 2024, compared to 1.78 million in 2023*.
*Trend Tracker, The UK Motor Claims and Body Repair Report, 2024-2025
A renewed focus on repair service & quality
With repair capacity becoming increasingly abundant, insurers have had the opportunity to take a step back from straightforward availability, and reassess their priorities when forging new partnerships.
While they’ve always focused on safety & quality, insurers have had more room to consider areas like sustainability, EV readiness, and customer service excellence, to add further value to their product offerings.
This has, in turn, seen repairers become more focused on attaining EV repair readiness, strengthening customer service strategies, and harnessing new technologies to report meaningful repair data.
Premium prices ease, but claims inflation continues
2024 saw motor insurance premiums fall for the first time in two years, decreasing by 2% for two consecutive quarters between April and September, according to data from the ABI.
However the data also shows that premium prices remained 9% higher than Q3 2023, as total claims costs continued to inflate year-on-year.
In total, insurers paid out 14% more in Q3 last year than for the same period in 2023, with repair costs an astonishing 26% higher on average. This indicates that, while the impact on policyholders appears to have eased, insurers are still facing significant inflationary pressures, requiring a continued focus on robust cost control strategies.
Record adoption of electric vehicles
2024 has seen the UK overtake Germany as the largest European market for Electric Vehicles. There are now more than 1.3 million fully-electric cars on our roads, accounting for just under 4% of the total car parc, and close to 20% of all new car registrations for the year.
Over 382,000 electric cars were registered in 2024, representing more than a 20% increase on 2023’s total. This increased uptake has seen new demand amongst policyholders for EV cover, putting pressure on insurers to deliver increasingly competitive premium prices.
Insurers have therefore prioritised building new, EV-capable repair partnerships, and seeking more robust electric vehicle data to enhance their risk strategies.
“Prestige makes and models have dominated EV sales this year, perhaps due to purchasing an EV being seen as more of a luxury than a necessity.
At Gecko, we are very interested to see how cheaper makes and models coming out of China impact EV take up, with a more environmentally conscious younger generation soon being able to afford to get behind the wheel of an EV.”
– James Fisher, CEO, Gecko Risk
Navigating Consumer Duty guidelines
The FCA’s Consumer Duty framework was introduced in 2023, providing new guidance for how insurers should act to ensure positive customer experiences & outcomes.
Like all regulated companies, insurers were given 12 months to prepare their first annual statement, documenting the steps taken to optimise the customer experience across their supply chains.
This required close collaboration with their partners – from accident management providers, to repairers, to ensure customer initiatives were mirrored and evidenced across all potential touchpoints. From implementing new self-serve technologies, to improving complaints & grievance handling, insurers and their partners made Consumer Duty compliance a core strategic focus throughout 2024.
What Will 2025 Bring for Motor Claims & Repair?
As 2025 begins, there are a number of ‘hot topics’ making their way around insurance & repair networks – including new entrants to the EV market, the need for more actionable repair data, and ongoing parts supply instability. Here we explore some of the key market shifts which are likely to dominate the conversation over the next 12 months:
1 – More consolidation in the insurance market?
The past few years have witnessed more consolidation amongst major insurers, as the industry grapples with increasing claims complexity, greater demand for data, and shifting customer expectations.
Mergers and acquisitions are viewed not just as a way to increase market share, but also to diversify risk, bolster motor claims and repair supply chains, and enhance overall operational efficiency. By combining their supplier networks and data resource, insurers are able to develop more accurate predictive models, and more streamlined claims processes, potentially improving outcomes and ultimately premium prices for policyholders.
With the complexity of claims and repairs only increasing as vehicle technology advances, this trend looks likely to continue in the year ahead. It’s also likely we’ll see similar consolidation reflected in repair, parts, and automotive markets, as major players seek to strengthen and diversify their capabilities and leverage more actionable market data.
What remains to be seen is the effect this consolidation will have on the wider claims supply chain, policyholder outcomes, and an increasingly competitive repair market.
2 – Challenger automakers in the EV Space: Which ones will take off?
More international EV manufacturers are beginning to make headway in the UK market, with a report from AutoTrader projecting new Chinese brands could take up 1/6 of the UK’s EV market by 2030.
Many of these vehicles come at a competitive price when compared to the American or European models currently leading the market, with comparable features, performance, and design. This will likely make them an appealing choice for drivers looking to switch to electric on a budget.
However, the success of these ‘challenger’ automakers will depend highly on their ability to establish consumer confidence – as with any new brand entering the market. Consumers will expect the same level of aftercare as they’re used to from more ‘familiar’ manufacturers – including after-sales services, maintenance, and warrantied repair.
Their entry to the market will also pose huge considerations for insurers, who will need to gain a firm understanding their implications for risk, repair complexity, and claims costs – as demand for cover increases with adoption. Repairers will also need to develop a solid approach to parts supply and repair methodology on a make and model basis, posing huge considerations for the entire claims supply chain in the coming months and years.
James Fisher of Gecko Risk, our EV & AFV insights partner, comments:
“There are now more than 10,000 BYDs on the road in the UK, with 75% of these being new registrations last year. The appetite for Chinese manufacturers will no doubt be driven by price, however brand loyalty and recognition will still have a part to play.
It should be noted that the British brand MG is controlled by Chinese state-owned manufacturer SAIC, and was in fact the most searched for EV make on Autotrader for 2024. MG is also one of the few manufacturers where average labour costs exceed that of parts costs. This perhaps indicates artificially low parts costs or indeed a deeper understanding of diagnostics required by repairers.“
3 – OEMs: More collaboration, or more repair complexity?
One of the key challenges currently faced by insurers and repairers is the need to navigate manufacturer-specific technologies, repair methods, and vehicle requirements. This is particularly prominent when it comes to newer models, and EVs, for which technical data on repair methods, particularly for onboard technologies, is increasingly difficult for repairers to access.
This has led to many vehicles requiring manufacturer input before they can be repaired post-incident, raising repair complexity, and ultimately cost & turnaround for insurers and policyholders.
This not only leads to poorer motor claims experiences for drivers of these vehicles, but also diminishes the model’s insurability rating, making these vehicles more expensive to cover.
The question is – will 2025 see OEMs become more open to collaboration on these fronts, or will we witness still more complexity as newer, more advanced models hit the market?
Mark Neat, Operations Manager at Activate Accident Repair, comments:
“With vehicles and their technology becoming more complex, repairers are facing significant challenges accessing manufacturer-approved repair methods, particularly for onboard systems and software. This naturally increases repair costs and extends turnaround times, making it harder to deliver efficient, cost-effective service – damaging insurability ratings for affected models.
Without greater transparency and sharing of methodology from manufacturers, these challenges are unlikely to ease in the near future. Until then, repairers will need to focus on leveraging partnerships with suppliers and work providers to stay ahead of new developments, and adopting strategies to manage costs and maintain capability.”
4 – Future proofing insurers’ repair strategies
With the capacity challenges of the past few years increasingly behind them, insurers are likely to shift their focus towards future-proofing their repair networks for the long-term. This means moving beyond securing capacity, and instead focusing on long-term resilience, service quality, technological advancement, and operational efficiency.
Repairers that demonstrate strong cost-control processes, advanced EV & ADAS repair capabilities, and tangible sustainability practices are likely to become front-runners for insurers as they enhance their networks. Equally, investment in connected data-sharing technologies could become an invaluable characteristic for repairers, enabling insurers to achieve real-time performance monitoring, and foster smarter, more proactive repair strategies.
As these priorities take centre stage, repairers capable of aligning with insurers’ evolving expectations are likely to become indispensable partners – playing a critical role in keeping claims costs down, and ensuring exceptional policyholder experiences throughout 2025 and beyond.
Adrian Furness, Managing Director of Motor Repair Network, comments
“In the immediate aftermath of the pandemic, the unprecedented strain on repair capacity meant insurers had to prioritise securing availability to keep up with customer demand. Now, with capacity on the rebound, they have the opportunity to build networks that go beyond the essentials.
By focusing on areas like cost control, sustainability, and EV readiness, repairers can ensure their service offerings actively support insurers’ goals for efficiency, performance, and delivering an exceptional customer experience.”
5 – Parts sourcing: Will it improve?
Sourcing replacement vehicle parts has become a key sticking point in recent years. A combination of production challenges for manufacturers, coupled with global supply chain pressures, have made it much harder to source new parts quickly, consistently, and at an agreeable cost.
Repairers have taken steps to mitigate this ongoing challenge, and its effect on their customers, by paying increased focus to ‘repair over replace’ methodologies, and leveraging alternative parts channels such as green/recycled components.
They’ve also sought access to more granular supply data from their repair & components partners, enabling them to anticipate demand surges ahead of time, and order/store specific parts proactively.
However, it’s likely 2025 will only elevate the need for such proactivity, as leading automakers face all-new uncertainties, and the UK transitions to a more advanced, internationally-sourced electric vehicle parc.
Proactive parts sourcing, repair over replace, and enhanced uptake of green & recycled components, could prove critical pivot-points for insurers as OE and aftermarket supply chains face continued uncertainty.
Mark Hobson, Operations Manager at Activate Parts, Comments:
“Collaboration has been key to overcoming the parts challenges of the past few years, with pressures on everything from production to shipping and storage. With supply chains continuing to face pressures in the new year, 2025 will likely bring familiar challenges.
We’re still seeing delays in parts availability for new models, particularly EVs, where components are often held back to keep production targets in sight.
The influx of new brands, including Chinese EVs, adds to this complexity, as aftermarket and green options aren’t yet viable, and OE supply and repair methodology still remains a grey area.
The key will be staying agile – strengthening supplier relationships, exploring alternatives, and closely monitoring supply trends to manage costs and turnaround times effectively when demand surges.”
In Summary
2024 was a transformative year for the motor claims industry, marked by recovery in repair capacity, increased focus on EV readiness, and the challenges of adapting to Consumer Duty regulations. While claims inflation remained a significant pressure, insurers balanced these costs with innovation in repair partnerships and deploying more customer-centric strategies.
The year also saw a surge in EV adoption, introducing both opportunities and complexities for insurers in terms of risk assessment, repair requirements, and premium pricing. Meanwhile, parts sourcing and supply chain challenges persisted, requiring proactive and collaborative approaches between insurers, repairers, and manufacturers alike.
As 2025 begins, insurers and their repair networks are focusing on future-proofing their strategies, prioritising sustainability, advanced repair capabilities, and enhanced data-sharing technologies. With new entrants to the EV market and ongoing supply chain uncertainties, agility and collaboration will be key to navigating the year ahead successfully.
