If the insurance company has written it off that means that they have calculated that the price they can get for it as is plus the cost of repair is more than the car is worth.
It may be a worthwhile project for someone who can do all or most of the work themselves and only count the cost of materials but properly repaired in a professional workshop it would not show sufficient return to be worth while. You also do not know just what you are going to find when you start work on it.
To put it in a few words they are asking too much for it. Probably the price should be at least £5K less and they know it.