UK insurers have revealed the amount they paid out for motor claims went up by about 18% last year, even as British drivers faced premium increases of more than a third – far above the rises in the rest of Europe.

The Association of British Insurers (ABI) put the average increase for car cover in the UK at 34%, from the end of 2022 to the end of 2023, but many drivers have seen rises far exceed that, even doubling in the case of electric vehicles (EVs).

UK drivers were also faced with much steeper hikes than their EU counterparts. ABI figures showed a 25% rise on average premiums, across the full year, from 2022 to 2023. By contrast, average premiums rose by 6% in Italy, 5% in Spain and 2% in France from 2022 to 2023, according to the recent financial results of one of Britain’s biggest insurers, Admiral, which also trades in Europe.

The ABI’s admission that UK car insurance payouts have lagged far behind the rising cost of cover could lead to renewed calls for an investigation into whether drivers in Britain have been taken for a ride.

In recent months, the Guardian has been inundated with messages from drivers who have been sent car insurance renewals 50% higher than a year ago.

The steep rise in motor premiums has been cited as a leading contributor to the cost of living crisis, and has even forced some motorists on low incomes to give up their vehicles. UK owners of EVs have complained that their insurance has doubled in the last 12 months, with some facing bills of £5,000 or more.

In Germany, the biggest European car market, car premiums have risen by 11% to 13%, according to reports – a larger increase than in its European neighbours but still nowhere near the rises imposed on British drivers.

The ABI has put out endless press releases to justify the jump in UK premiums. In its latest figures on Saturday, it said vehicle repair costs jumped 31% in 2023, payouts after vehicle thefts jumped 23%, while cost of providing temporary replacement vehicles leapt 35%.

However, it also revealed that total UK payouts for claims only rose 17.85%, suggesting that insurers have been using the big jump in inflation as a cover to increase margins. The ABI said insurers paid out £9.9bn for motor claims last year – up from £8.4bn in 2022.

Both the European comparison and the ABI’s most recent data will only add to calls on regulators to examine whether British drivers have been overcharged. The Financial Conduct Authority has so far ruled out a full investigation into the market, despite calls in parliament and elsewhere.

“While we do not set or control insurance prices, we are monitoring the motor insurance market closely to ensure customers are receiving fair value,” the regulator said in March.

Carla Lockhart MP is among those who have called on the government to press for “closer scrutiny of the industry”. Lockhart told a parliamentary debate that her constituents were up in arms at “the exorbitant cost” of insurance.

Jonathan Fong, the ABI’s manager for general insurance policy, said: “Significant and sustained cost pressures faced by insurers, such as a 31% rise in repair costs over the last year, have impacted on the cost of cover.

“Despite this, insurers continue to do all they can to ensure competitively priced motor insurance. Through our recently published roadmap, the industry is working hard to combat rising motor insurance costs. And it can still pay to shop around to get the policy that best meets your needs at the most competitive price.”

Admiral said that UK car insurance premiums are higher in the UK than other EU countries because of unlimited liability. “Injury claims across the countries are different and subject to different drivers of inflation and Italy, Spain and France saw different degrees of inflation compared with the UK and have different structures,” it said.

• This article was amended on 12 and 22 April 2024 to clarify that the 34% rise in UK car insurance premiums compares Q4 2022 with Q4 2023, whereas the figures given for rises in European countries are full-year averages from 2022 to 2023. Over the same period, the corresponding rise in the UK was 25%. This information has been added, and the article headline has been revised accordingly.