Motor premiums track claims costs, and claims costs are rising faster than general inflation almost everywhere. A breakdown of what actually makes a repair expensive — glass, parts, paint, labour and batteries.
When a motor premium goes up, the explanation is almost never mysterious. Premiums track claims costs, and claims costs have been rising faster than general inflation in most markets for half a decade. In the UK — one of the few markets that publishes granular claims analysis — costs rose 34% between 2019 and 2023 while general inflation rose 21%. The gap is the story. Understanding where it comes from tells you what motor insurance will cost next year, in Riyadh as much as in London.
The short version: cars have become more expensive to fix faster than they have become less likely to crash. Four components drive it — glass, parts, labour and batteries — and each is worth taking apart.
The windscreen is no longer glass
A windscreen used to be the cheapest claim an insurer handled: a sheet of laminated glass and an hour of fitting. On a modern car, the windscreen is a sensor mount. Lane-keeping cameras, rain sensors, heads-up display projectors and heating elements are bonded to or calibrated against it, which means replacing the glass also means recalibrating the advanced driver-assistance systems that look through it. In the UK alone, ADAS-related repairs and recalibrations are estimated to cost more than 300 million pounds a year.
The result is a claim category that quietly migrated from trivial to substantial. The same logic applies to bumpers full of parking sensors and wing mirrors with blind-spot radar: the panel is cheap, the electronics attached to it are not, and the calibration labour afterwards is specialist work that many bodyshops cannot do in-house.
Parts travel further than cars do
Spare parts pricing is a supply-chain story. Most markets import the majority of their parts, so a repair bill carries exchange rates, freight costs and manufacturer pricing power inside it. Saudi Arabia is a clear case: nearly the entire car parc is imported, so every collision repair is priced partly in yen, won, euros and dollars before a workshop touches it. When global parts prices moved sharply after 2021, repair costs in import-dependent markets moved with them — with a lag, because insurers reprice annually while parts reprice continuously.
Paint and consumables follow the same curve, and there is a labour layer on top. Modern repair requires technicians certified on specific brands, materials and driver-assistance systems, and those technicians are scarce. Scarce specialist labour prices like any scarce input.
Batteries raise the ceiling
Electric vehicles compress the whole problem into one component. UK analysis puts battery-electric repair costs roughly 35% above comparable petrol vehicles, with battery packs costing on the order of 8,000 to 10,000 pounds. A moderate rear impact that would be a repair on a combustion car can total an EV if the pack is compromised, because the single most expensive component sits low in the floor where impacts reach it. As EV share grows in any market, the average severity of a claim grows with it — even if driving behaviour never changes.
Frequency down, severity up
Here is the seeming paradox: the same driver-assistance technology that makes windscreens expensive also prevents crashes. Automatic emergency braking and lane-keeping demonstrably reduce claim frequency. So motor claims are becoming rarer and more expensive at the same time — fewer incidents, each carrying more electronics, more calibration and more imported parts. Whether premiums rise or fall depends on which curve moves faster, and for the past several years severity has been winning.
What this means for premiums — and for platforms
- Expect annual repricing as the norm, not the exception. A market where claims severity compounds cannot hold rates flat, and platforms embedding motor cover should build forecasts on volumes and attach rates rather than on stable premiums.
- Vehicle-level pricing will keep getting sharper. Two cars of the same value can carry very different repair-cost profiles depending on their sensors and drivetrain, and insurers increasingly price that difference.
- Repair-network quality becomes a selling point. Where parts and specialist labour are the bottleneck, the insurer with the better workshop network settles claims faster — which is what customers actually remember.
A note on scope: the specific figures above are UK figures, cited because the UK publishes claims-cost analysis at a granularity most markets do not. The mechanisms — ADAS calibration, imported parts, specialist labour, battery severity — are structural and apply broadly, including in the Gulf. Where we describe the Saudi market we have kept the argument qualitative; we have written separately about Saudi repair costs and premium cycles, and this piece should be read alongside that one.