Motor and home insurance premiums in the UK continued their decline in August, according to the latest General Insurance Price Index from Pearson Ham Group. This sustained downward movement has been evident throughout 2024, reflecting ongoing adjustments in both markets. The average premium for the top five motor insurance providers slipped by 0.9% compared to July, placing prices 16.1% lower than a year earlier and 6.9% below January levels. In August, the median top-five motor premium stood at £434, slightly down from £438 in July. This suggests a gradual softening of prices rather than a sudden drop.
Home insurance saw even more pronounced changes. The average top-five combined buildings and contents premium dropped by 2.0% from July. Compared to last year, premiums are now 11.7% lower and have decreased by 9.9% since January. Notably, the median home premium fell below £200 for the first time in a year and a half, reaching £196 in August.
Regional trends further highlighted these shifts. Motor insurance premiums fell most sharply in the North East, West Midlands, and North West, each down by 1.3%. For home insurance, reductions were most significant in the West Midlands (-2.5%), Yorkshire & the Humber (-2.4%), and the North West (-2.3%).
Market Dynamics Point Toward Stabilisation and Segmentation Ahead
Pearson Ham Group noted that motor insurance pricing is moving closer to stability after a period of significant corrections. The modest decline in August indicates that prices may be entering a steadier phase. Future movements will likely depend on factors such as claims severity, costs of parts and repairs, and competition for new business.
In contrast, home insurance has experienced a sharper reset over recent months. Another notable decrease in August has eased pressure on premiums significantly. Analysts expect greater segmentation going forward, with outcomes varying more by property type, region, and recent claims experience as insurers adjust pricing to match actual loss costs before winter weather arrives.
Major UK insurers have responded to these price changes by recalibrating their strategies following two years of volatility. Aviva has placed greater emphasis on pricing discipline in motor insurance, while Admiral reported increased competition in home insurance that is eroding margins. Direct Line, under new leadership, has tightened underwriting controls for its motor portfolio—a sign of an industry-wide shift toward more selective and segmented pricing strategies.
Overall, August’s data reinforces the view that the motor insurance market is progressing toward stabilisation, whereas home insurance is undergoing a more dramatic reset. Both sectors are adapting to evolving market conditions as insurers seek to balance competitiveness with sustainable pricing.
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