Insurance Market Sees Continued Softening in Motor and Home Premiums
The latest General Insurance Price Index from Pearson Ham Group reveals that both motor and home insurance premiums declined at a faster pace in May 2025. This trend suggests a further softening across the personal lines market.
Motor Insurance Premiums Fall Sharply
Motor insurance prices dropped by -1.7% in May, a significant acceleration from April’s more modest -0.8% fall. This sharper decline indicates that the softening of the market may be more profound and sustained than previously anticipated. Over the past 12 months, average quoted premiums have fallen by -17%, with the median top-five quoted premium now standing at £455, down from £467 in April.
Stephen Kennedy, Director at Pearson Ham Group, commented, “While last month’s data hinted at a possible stabilisation in motor pricing, the renewed acceleration in May points to a continued softening of the market. Insurers appear to be adjusting rapidly to shifting claims dynamics and competitive pressure, which is now manifesting as more pronounced reductions across a broader range of customer segments.”
Home Insurance Premiums Experience Largest Decline
Home insurance premiums saw their most substantial monthly decline of the past year in May, falling by -1.9% and bringing the annual drop to -6%. The data suggests that competitive pricing and shifting risk perceptions are exerting renewed downward pressure, further softening the market.
Frances Luery, Product Manager at Pearson Ham Group, noted, “The pace of change in May underlines that the home insurance market is now experiencing significant softening. This is the largest single-month fall we’ve recorded in recent months and points to a rapidly evolving pricing environment. Insurers are clearly re-evaluating their strategies, and as pricing becomes more granular, we expect to see even greater segmentation and volatility emerge.”
Market Implications
These sharper-than-expected declines reinforce the view that both motor and home insurance markets are undergoing a period of notable and possibly prolonged softening. As insurers contend with fluctuating claims costs, inflationary pressures, and heightened competition, pricing strategies are likely to remain fluid and increasingly data-driven.
