Motor insurance premiums continued their downward trend in Q3 2025, though the rate of decline has slowed compared to earlier in the year, according to the latest data from the General Insurance Price Index by pricing consultancy Pearson Ham Group.
The average price of the top five quoted motor premiums fell by 2.9% in Q3, a noticeable deceleration from the 4% drop observed in Q2. On a year-over-year basis, premiums have dropped by 15%.
Stephen Kennedy, Director at Pearson Ham Group, highlighted that while motor insurance pricing continued to edge downward, the pace of reductions has steadied. He described this shift as a “more controlled phase of competition,” with insurers now refining their market strategies instead of focusing on large price cuts.
“This suggests the market is nearing a natural floor,” Kennedy explained. “From here, we expect to see more significant pricing differences based on customer type, risk profile, and distribution channel, as insurers aim for sustainable market share rather than short-term volume gains.”
In contrast, home insurance premiums saw a 4.9% drop in the latest quarter, a larger decline than the 3.8% fall recorded in the previous quarter. Year-on-year, home premiums have decreased by 13%, following steeper reductions earlier in the year.
Frances Luery, Product Manager at Pearson Ham Group, commented, “We’re seeing sustained competition across the home insurance market, with premiums now significantly lower than last year. However, the data still reflects a market recalibrating after a prolonged period of claims and cost inflation.”
She added, “The key question now is how much further prices can realistically fall before we see renewed upward pressure due to claims trends and weather-related losses as we head into winter.”
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