Under 25s motor switching fall severely dents new business flow

As motor insurance premiums fall, so too do the number of customers shopping for new policies and ultimately switching their providers.

And the young driver market – those between 17 and 25 years of age and traditionally the highest flux demographic – has seen a particularly large decrease in switching behaviour, diminishing a usually reliable route for insurers to source new business.

This is according to the latest Motor Insurance Switching Index data, provided for analysis exclusively to Insurance Times by market research firm Consumer Intelligence.

Over the 12 months ending in November 2025, shopping and switching rates have fallen for both the overall consumer population and the under-25s segment.

At the start of the period, 83.3% of all consumers were actively browsing for new policies in advance of their renewals, while the rate among under-25s stood slightly lower at 81.8%.

By November 2025, those rates had fallen to 68.7% for the overall population and 70.4% among drivers under 25 – a fall of over 10 percentage points each.

What may be more concerning to insurers is that the rates of policy switching, and therefore the opportunities to attract new business, also fell.

Overall switching rates fell from 46.2% to 35.1% across the period, while the rate among the under-25s plummeted from 63.4% to 44.4%. The age group even briefly saw lower switching levels than the overall public, reaching a nadir of just 30.2% in April 2025 – an uncharacteristically small figure.

Tom Oliver, insight manager at Consumer Intelligence explained that “for years the assumption has been that young drivers are highly price-sensitive and quick to shop”.

“What our data shows is that when prices stabilise and renewal shocks disappear, shopping drops away very quickly,” he added.

Plummeting premiums

What then is driving the lack of switching behaviour among young drivers? The answer appears to largely lie with premium prices.

While premiums have fallen across the board, young drivers have seen bigger savings than most.

According to an average of the top five quoted premium prices on price comparison websites compiled by Consumer Intelligence, motor policies dropped by 18.6% between September 2024 and November 2025.

Under-25s initially saw more modest savings, but price falls in their category caught up across the second half of the period and prices now stand a dramatic 21.1% lower on average. For the age group that pays the highest premiums, this can often amount to savings of several hundreds of pounds.

Consumers may be pleased to pay less for cover, but as Sarah Vaughan, director at insurance consultancy Angelica Solutions explained, they have to be careful that their cheaper cover is not enabled by hollow policies that tempt the “most financially vulnerable or stretched”.

“Some consumers are paying less, but are also getting less. Are we storing up a problem of underinsurance, or a lack of understanding, which will manifest itself in problems at the claims stage?” she added.

Solidifying issue

Lower switching rates will be especially concerning for growing insurers who are looking to increase the number of customers on their books. While they will be hoping that price competition levels out, there is evidence that the switching rates will remain low for some time.

Indeed, the percentage of young drivers paying for their insurance in annual rather than monthly payments – a key indicator of financial comfort and long-term commitment – has changed considerably.

In the first quarter of 2023, more than half (53%) of young drivers were paying for their motor cover in monthly instalments, but by the third quarter of 2025 the figure had shrunk to just 27%, well below the historical average of 51%.

Oliver explained: “What we saw through 2025 was a structural change in the young driver market. Pricing reshaped behaviour, shrinking the active comparison pool and making confidence, experience and brand far more important than simple headline price.”

While the soft market at large did briefly appear to be bottoming out in 2025, it reasserted itself in the second half of the year, and few are forecasting an imminent reversal to rate changes.

How then can insurers tempt customers to switch when undercutting on price becomes infeasible? A Consumer Intelligence research survey suggested that the answer lies in service quality.

Outside of price, the most commonly cited reasons for changing provider were that the new provider offered a better level of cover, the consumer received a personal recommendation for a new provider, or that the consumer wanted to add an additional driver to their policy.

With customer flux markedly down in key demographic for new business acquisitions, many insurers will need to consider reassessing their value proposition to avoid the low switching levels hamstringing their firm’s future growth.