’The current trend of market consolidation and fear of losing scale to a handful of mega-insurers may be a contributor as insurers continue to drop rates to remain competitive,’ says head
Car insurance premiums fell 16% over the last 12 months, with UK policyholders now paying £757 on average for their cover, new data from Confused.com and WTW has revealed.
The figures, published today (19 June 2025) in the two firms’ latest Car Insurance Price Index, showed that motorists are paying £144 less than they were one year ago, when average prices stood at £901.
This continues a trend of falling prices that began in Q1 2024, after average premiums reached a record high of £995 in Q4 2023.
Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said: “Average premiums have continued to retreat from an all-time high in 2023 in the face of rising theft and vehicle repair costs continuing to put pressure on claims inflation.
”The current trend of market consolidation and fear of losing scale to a handful of mega-insurers may be a contributor as insurers continue to drop rates to remain competitive and maintain critical mass, despite pressure on margins likely to persist through 2025.”
Regions
All regions of the UK saw price drops over the period, however inner London remained the most expensive region for motor insurance (£1,185), closely followed by outer London (£967), West Midlands (£909), Manchester and Merseyside (£896) and Leeds and Sheffield (£854).
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Southwest England was the cheapest region for cover at £515 per policy, with central and north Wales similarly cheap at £524.
Steve Dukes, chief executive at Confused.com said: “Car insurance prices have been falling for almost 18 months. Insurers are using data to gain a better understanding of customer risk, reducing price to remain competitive in the key target segments most important to them.
“That said, prices are still considerably higher than they were five years ago. In order to tackle the long-term upward trend in pricing, there’s a need for the industry to look at the underlying cost of providing insurance from every angle, harnessing technology and data to increase efficiency, while also improving the customer experience.”
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