Insurers gearing up for changing motor trends

In the motor market, the times they are a changing, with recent Uswitch research into driving habits, published in June 2025, highlighting a gradual shift towards more flexible driving habits.

In particular, research revealed that active memberships of car clubs – which enable cars to be rented by the hour or day – rose by 143% between 2019 and 2023, suggesting more people want access to a car without taking on the full-time costs and responsibilities of owning one.

Temporary car insurance, which can cover this kind of part-time driving, is therefore proving more popular, with Uswitch reporting that searches for it have rocketed 236% since 2021.

Most major motor insurers now have some sort of flexible product in their wheelhouse and some insurtechs offer the ability to literally insure by the hour via an app. 

But, before we conclude we are in the midst of a motor insurance revolution, it’s important to consider such figures in their true context.  

Matthew Connell, director of policy and public affairs at the Chartered Insurance Institute (CII), said: “The actual Uswitch findings are not that remarkable in themselves because percentage increases can sound very spectacular from a low base and the fast technology wasn’t there to accommodate temporary insurance before – there’s been something of a kick start once it emerged.”  

The Acorn Group, which saw 200% growth in the short-term policies it sold in 2024 through its Briefly brand and via brokers, also points to other factors contributing to the purple patch in flexibile motor policies.  

Alasdair Taylor, general manager of Briefly, said: “While there have always been circumstances where people have needed short-term insurance, greater market awareness amongst consumers is converting market opportunity into market demand. 

“And the cost of living crisis has been drastically changing the nature of car ownership and contributing significantly to the growth in this segment.” 

Affordability issues, particularly for younger drivers, probably also play a part in other trends highlighted by the same Uswitch research. 

Between 2003 and 2023, there was a 20% drop in the average number of trips taken by main drivers in personal cars and a 10% fall in the numbers of 21 to 29 year olds holding a licence. 

Broader trends     

None of these trends will be causing many sleepless nights for motor insurers, however, which are already highly aware of changing ownership models and of the gradual shift towards insuring vehicles, rather than the driver.  

For example, according to The Car Expert, around 90% of all new UK car purchases are now paid for using Personal Contract Purchase (PCP). 

Every new car in the UK also now has to have some element of Advanced Driver Assistance Systems (ADAS) – electronic systems in vehicles that assist drivers in driving and parking functions. Autonomous Emergency Braking (AEB) has, in particular, been part of the regulatory system since 2018.

In comparison to these amendmends in car design, the trends Uswitch highlighted seem relatively small fry, even if the move towards subscription ownership of vehicles via car club membership certainly fits in with the overall move towards insuring vehicles.  

The temporary insurance used by members of smaller car clubs and other car sharing communities tends to have an underwriting focus on both driver and car – with different insurers using different models.

And the very largest car clubs insure via motor fleet policies which, although incorporating an element of driver focus, are mainly concerned with the average performance of the fleet in general.           

Graeme Trudgill, chief executive of Biba, felt that the work being carried out by the UK’s not-for-profit automotive risk intelligence centre Thatcham Research, which brought in ADAS systems, currently dwarfs anything that Uswitch is flagging up.

He said: “In recent years we have seen great strides with the addition of ADAS systems, such as Autonomous Emergency Braking, which can greatly reduce the number of low-speed incidents. Thatcham’s safety assessment scores are also important and are reflected in premiums.  

“Many people have been driving less since Covid and the onset of hybrid working and may consider joining a car club, especially for a second car.

”This has environmental advantages and we are definitely seeing a move, but I don’t think the current model we have for insurance is going to be replaced in the near future.” 

Further down the road 

Nevertheless, by the time the shift away from insuring the driver is complete – with the advent of fully autonomous cars – we will certainly be looking at a different insurance model.

This could actually make life easier for insurers, which arguably face the worst of both worlds when grappling with both driver and car.              

Ben Townsend, head of automotive at Thatcham Research, said: “At current level two [autonomous] systems, the driver maintains responsibility for the vehicle. But when we get to level three, it gets complex because the vehicle is responsible when the system is activated, while the driver is liable for retaking control. So, there is more nuance to consider.  

“At level four it will be much easier to define responsibility and it’s at level five, which is fully autonomous, when the car ownership model fundamentally shifts.

“In all likelihood, that’s a long time away, but we are moving along this path and some insurers are further down it than others. There is a risk that the less proactive ones will fall behind as the market shifts.” 

Those taking a proactive stance on different driving models and autonomous driving clearly need to make effective use of data, both from their own internal sources and from the aggregated market information provided by Thatcham Research.  

There may currently be laggards, but no one doubts the ability of insurers or brokers as a whole to prove innovative and flexible enough to rise to this challenge over time.