This question is a bit confusing, because the word or phrase that the insurance company might use is different from the actual thing they're describing.
For example, they might use the phrase "goodwill gesture" or "compensation", as other answers have suggested, but it is actually neither of those things: it's a blatant attempt to avoid fulfilling their contractual obligations: so you could say they are trying to "weasel out of the contract", or "fob you off", or "wriggle out of replacing the parts", etc.
So, what you would say, and what they might say, are very different. It's not clear which of these two things you're actually asking about.
If this is a real situation, then your response should obviously be "No thank you: I would like you to replace the parts, as per our contract. If this is not possible then you may need to replace the entire vehicle, as the contract states you would return the car to its original condition", or something along those lines.