The Industry · 04
A Global Problem, Documented Market By Market.
Four independent trade bodies on three continents describe the same pressures in their own published research: repair complexity rising faster than process, a cost tail that accrues by the day, and organised fraud adapting faster than the response to it.
Only markets we can source properly are included. Each figure carries its publisher, its year and its currency.
A necessary clarification. This page is about the industry, not about Kempron. Kempron Inc. is headquartered in Mississauga, Ontario, has no other offices, and builds for the Canadian and United States markets. We do not operate in the United Kingdom, continental Europe or Australia, we hold no international clients out as such, and nothing on this page should be read as implying otherwise. The problem is worldwide. The company is not.
North America
Canada And The United States
Two markets, one border, very different regulatory structures and a common cost trajectory.
Canada
Canada is not one motor insurance market but several. Ontario, Alberta and the Atlantic provinces operate private systems under provincial regulators; British Columbia, Saskatchewan and Manitoba operate public insurers; Quebec splits bodily injury into a public scheme and leaves property damage with private insurers. A vendor that treats Canada as a single market will be wrong in at least three provinces.
The cost pressure is concentrated in theft and integrity. Équité Association reports approximately $900 million in auto theft insurance claims in 2025 despite an 18% fall in theft volumes, with national recovery at 59% and a 72% rise in vehicle finance fraud detected at the ports of Montreal and Halifax. (Équité Association, 2025 Auto Theft Trend Report, 11 February 2026. Figures in Canadian dollars.) Ontario alone accounted for $485 million of theft claims cost in 2025, with claim counts up 97% and losses up 330% since 2017. (Insurance Bureau of Canada, 13 May 2026, using GISA data.)
The Insurance Bureau of Canada estimates that insurance fraud costs Canadians well over $1 billion a year in added premiums. (Insurance Bureau of Canada, 2021. This is the most recent public IBC estimate we have located and should be read as dated.)
United States
The United States is regulated state by state, with the National Association of Insurance Commissioners providing model laws that states adopt in varying forms. It is also the market with the deepest published claims data, which is why much of the repair-side evidence on this site is American and labelled as such.
CCC Intelligent Solutions reports total loss frequency at 23.1% across all loss categories in 2025, a record; average total cost of repair of $4,818; calibrations on 28.3% of repairable estimates, up from 21.8%; and average paid bodily injury severity up 10.3% year over year and 32% over four years while crash energy has remained close to 2019 levels. (CCC Intelligent Solutions, Crash Course 2026, 31 March 2026. Figures in US dollars.)
The supply side is the binding constraint. TechForce Foundation projects 73,354 new-entrant collision technicians needed between 2025 and 2029 against a pipeline meeting roughly 42% of annual demand, with collision recording the highest turnover of ten sectors studied at 60.7%. (TechForce Foundation, Technician Supply, Demand & Opportunity Report, 2026.)
United Kingdom
Record Payouts, Falling Premiums, Rising Repair Cost
The United Kingdom is the clearest published example of the central dynamic: claims cost driven by repair complexity rather than by accident frequency.
United Kingdom motor insurers paid out £11.9 billion across 2.5 million claims in 2025. Payouts for vehicle damage alone totalled nearly £7.5 billion, or 63% of total claims paid. The Association of British Insurers attributes the pressure directly to the complexity of modern vehicles — advanced systems, sensors, cameras and high-value components — and notes that pressure on parts supply chains results in longer repair times, which in turn adds further cost. (Association of British Insurers, 11 February 2026. Figures in pounds sterling.)
That last clause is the whole thesis of this site, stated by a trade body in another jurisdiction: longer repair times add further cost. Duration is not a symptom of expense. It is a cause of it.
The premium side moved the other way. The average cost of cover in the fourth quarter of 2025 was £559, 10.2% lower than the same quarter in 2024, with the full-year average at £564, 9% below 2024. (Association of British Insurers, 11 February 2026.) Premiums falling while claims cost rises is a margin compression, not a resolution.
Fraud In The United Kingdom
The ABI reported £1.16 billion of detected fraudulent general insurance claims in 2024, up 2% on 2023, across more than 98,400 claims, a 12% rise from 81,100 in 2023. Motor was the largest single category, with 51,700 detected motor scams worth £576 million, representing 53% of all detected bogus claims. (Association of British Insurers, November 2025.)
Note the word detected throughout. Every published fraud figure in every market is a measure of what was caught, not of what occurred.
Regulatory Shape
Conduct is supervised by the Financial Conduct Authority, prudential matters by the Prudential Regulation Authority. The FCA's Consumer Duty raises the standard for outcomes delivered to retail customers, which is directly relevant to claims handling. Data protection sits under the UK General Data Protection Regulation and the Data Protection Act 2018. The ABI maintains a dedicated policy position on AI regulation, which tells you how live the question is for the sector.
Continental Europe
Twenty-Seven Markets, One Regulatory Ceiling
Europe is where the tension between fraud prevention and data protection is most explicit, and where it has been stated openly by the industry itself.
Insurance Europe estimates that detected and undetected fraud combined accounts for approximately 10% of total claims expenditure in Europe, affecting every national market and every business line from motor to property and health. (Insurance Europe, Breaking Boundaries: A European Approach To Countering Insurance Fraud, 5 December 2024.)
The federation's structural point is that fraud has gone digital and cross-border while the response has stayed national, because the laws and the law enforcement powers are national. Cross-border cooperation exists, but as ad hoc coalitions and regional protocols rather than as standing infrastructure. (Insurance Europe, 5 December 2024.)
Insurance Europe is also unusually direct about the regulatory ceiling. It identifies the General Data Protection Regulation and the EU Artificial Intelligence Act as constraining the industry's ability to collect and process the data needed to fight fraud, and notes that the sector is awaiting a European Commission initiative on access to vehicle-generated data. (Insurance Europe, 5 December 2024.)
What A Vendor Inherits In Europe
- GDPR. The baseline for any processing of claims data, with lawful basis, minimisation, purpose limitation and data subject rights all engaged. Article 22 restricts decisions based solely on automated processing that produce legal or similarly significant effects.
- The EU Artificial Intelligence Act. In force since 1 August 2024 and applying in stages. Transparency obligations under Article 50 apply from 2 August 2026, and obligations for Annex III high-risk systems apply from 2 December 2027. Annex III expressly lists AI systems used for risk assessment and pricing in health and life insurance as high-risk. (EU AI Act, as summarised by the Future of Life Institute's AI Act resource, updated 31 August 2026 following the Digital Omnibus amendments.) Our reading of what this means operationally is here.
- Solvency II for prudential supervision, and EIOPA at European level alongside national supervisors.
- National variation. Motor insurance structures, bodily injury compensation and bodily injury quantum differ substantially between member states. Europe is a single regulatory ceiling over twenty-seven different claims markets.
We note for completeness that Insurance Europe's published aggregate motor claims dataset has not been refreshed since its 2020-data edition, which is why this page cites the federation's fraud analysis rather than its market totals.
Australia
The Most Completely Documented Version Of The Cost Tail
The Insurance Council of Australia's 2025 policy paper is the single best public account of where motor claims cost actually accrues, because it itemises the categories other markets discuss only in aggregate.
Comprehensive motor premiums in Australia rose 42% between 2019 and 2024, reaching an average of $1,052 a year in 2024. Average claims cost rose 42% over the same period, tracking premiums exactly. Insurers' motor claims costs as a proportion of premiums collected rose from 89% in June 2019 to 94% in June 2024. (Insurance Council of Australia, Motor Insurance Policy Paper: A Roadmap For Reducing Rising Premiums, 23 March 2025. Figures in Australian dollars.)
The itemisation is what makes this source valuable:
| Driver | Change | Detail As Published |
|---|---|---|
| Repair costs | +26% | Since 2022, on rising wages, more expensive parts and longer repair times. Repair now roughly 60% of claim cost. |
| New car prices | +39% | Since 2019. Used car values about 32% higher. Write-offs are around a quarter of all claims costs. |
| Rental car cost to insurers | +70% | Since 2019. Attributed to extended repair wait times and to the growth of credit hire firms. |
| Credit hire claims volume | 4x | Quadrupled since 2019, and on average three times more expensive than standard claims. |
| Motor insurance fraud | $560m | Cost to the industry in 2023, including staged accidents and misrepresentation of damage. |
| Claims cost as share of premium | 89% → 94% | June 2019 to June 2024, indicating declining underwriting profitability. |
Three of those six lines are duration costs. Rental accrues per day and is explicitly tied by the ICA to repair wait times. Credit hire is a market that exists because the wait exists. Storage and towing are the subject of the ICA's call for enforceable fee caps across all Australian jurisdictions. (Insurance Council of Australia, 23 March 2025.)
Australia's regulatory structure differs again: prudential supervision by APRA, conduct by ASIC, a General Insurance Code of Practice administered by the ICA, and compulsory third party injury schemes run state by state.
Synthesis
What The Four Markets Have In Common
- Repair complexity is the primary cost driver everywhere. CCC in the United States, the ABI in the United Kingdom and the ICA in Australia each independently identify vehicle technology, sensors and calibration as the leading cause of rising claims cost. Three trade bodies, three datasets, one conclusion.
- Duration converts into money by the day. The ABI names longer repair times as a cause of further cost. The ICA quantifies it: rental cost to insurers up 70%, credit hire quadrupled. Enterprise measures it directly in the United States at 15.5 days.
- Fraud is organised, adaptive and measured only by what is detected. Équité in Canada, the ABI in the United Kingdom, Insurance Europe across the continent and the ICA in Australia all report the same direction of travel and the same shift toward documentary and identity-based attacks.
- Regulation is tightening on data and on automation simultaneously. The EU AI Act, the NAIC model bulletin in the United States, OSFI's guidelines in Canada and the FCA's Consumer Duty in the United Kingdom all arrived within a few years of each other. The detail is on the Regulators page.
- Nobody has fixed it. Every market has reform proposals in flight. None of them change the underlying structure described in The Claims Problem, because that structure is a property of how the work is distributed between independent parties rather than of any single country's rules.
Again, plainly. The problem is worldwide. Kempron is a Canadian company in Mississauga, Ontario, with no other offices, building for Canada and the United States. We include the international evidence because it is the best available account of a problem we are working on, not as a claim about where we operate.