Which personal lines products will find sustainable profit in 2026?

In a cyclical insurance market, short-term trends may be blurred by political, economic and social forces. Yet, over the long-term, the underlying growth potential of a product can emerge.

Having analysed the forecasts of commercial lines products in the first article of this two part series, Insurance Times now investigates the growth potential of eight major personal lines products to answer the question of where personal lines market participants will find sustainable profit in 2026.

To predict how each line would perform in 2026, polynomial regressions – a type of analysis aimed at capturing non-linear relationships between variables – were fitted to comprehensive gross written premium (GWP) statistics sourced from the Bank of England’s Insurance aggregate data annual report, which was published in 2024.

This report covered 99% of the UK insurance market’s GWP up to 2023, meaning that this data set offers the most comprehensive and current view of the industry.

Income protection insurance had the lowest GWP of any major personal line product in 2023 – it was one of only three lines to see a fall in income over the five-year reporting period, dropping from £1.4bn in 2018 to £1.3bn in 2023. Despite seeing a positive growth in 2023, income protection is predicted to continue to decline towards 2026, ending the year with a GWP of £1.1bn.

Assistance insurance – which provides logistical support in the event of an incident rather than financial support – also saw earnings fall between 2018 and 2023. Despite a slight resurgence in profits in recent years, the line is predicted to fall from £1.5bn GWP in 2023 to £1.2bn in 2026, though this trend looks set to reverse over the longer term.

Personal credit insurance, which took a substantial earnings hit during 2020’s Covid-19 pandemic, has since rallied and posted growing profits in each of the last three years. Despite this, GWP figures remained £0.2bn lower in 2023 than 2018 and, as such, the line is predicted to see flat growth moving forward, finishing 2026 with £2.1bn in yearly written premium.

Financial loss insurance was the standout growth prospect among personal lines products. It posted increasing profits in every year over the reporting period except 2019, with strong yearly returns resulting in the highest growth forecast among the lines analysed. Finishing 2023 with a GWP of £3.8bn, the line is projected to grow 18.5% by 2026 and finish the year with an income of £4.5bn.

Motor (other), meanwhile, has grown from £2.9bn in 2018 to £3.9bn in 2023. This product is projected to grow another £0.2bn by 2026, finishing the year at £4.1bn GWP. Given the disproportionate effect the Covid-19 pandemic had on motor insurance, where national lockdown rules lessened driving, it might be expected that this line of business will overperform its current projection.

Insurance for medical expenses showed strong growth consistently over the reporting period, posting a GWP increase in each year apart from 2020 – this fall was severe enough that it took until 2022 for GWP to return to the level seen in 2019. Because of this stutter, a more modest growth trajectory has been predicted, which would see the line grow by £0.2bn to finish 2026 with a GWP of £8.3bn.

Motor liability, traditionally one of the largest personal lines products, slumped considerably during the Covid-19 pandemic, but has since seen profits return to expected levels. Having recorded a 19% growth rate over the Bank of England’s five-year reporting period, profits are forecast to grow another 8% by 2026, achieving a GWP of £9.9bn by the end of that year.

The largest personal line product in 2023 was property insurance, bringing in £10.3bn across that year. The line has performed well in recent years, but an almost entirely flat performance between 2018 and 2021 has limited its projected growth trajectory. It is predicted to grow by only another £0.1bn to finish 2026 with a GWP of £10.4bn.