UK motor premiums dropped by £60 ($125) on average over the past year despite record costs for car claims, according to the Association of British Insurers.  

The average premium from April to June was £562 ($1169), down from £622 ($1294) in the same period last year. The association says the drop is more pronounced when accounting for inflation, amounting to £81 ($168).  

It was the second consecutive quarterly drop following a 6% fall in the preceding period.  

British motor insurers paid out more than £3.1 billion ($6.45 billion) in the second quarter, continuing a record-breaking trend.

Repair bills rose by £100 million ($208 million), accounting for about £2.1 billion ($4.37 billion) of claim costs. Claim settlements increased about 5%, with 669,000 claims closed.  

The association says factors including advances in vehicle technology, a shortage of skilled workers and broader economic inflation have driven costs.

It also notes high costs arising from thefts, with the average claim at £11,800 ($24,555).  

ABI general insurance policy head Mark Shepherd says the “encouraging” premium figures provide “much-needed relief to drivers”.

“But with the cost of cover still weighing on household finances, we must not lose momentum in tackling the persistent pressures driving up claims,” he added. “That’s why we continue to urge the government to support the industry by investing in training for the repair sector, improving road safety and holding firm against any rise in insurance premium tax in the autumn budget.”  

Earlier this year, the association released a 10-point roadmap for tackling motor insurance costs.