Home insurers set for profit in 2025, although losses expected in 2026

UK home insurers are set to make an underwriting profit in 2025, with a net combined ratio (NCR) of 98%, according to analysis of industry data by Deloitte.

This means that, for every £1 taken in premiums during the year, home insurers will have paid out 98p in claims and expenses.

It comes after average premiums remained steady in 2025, falling to an average of £326 for the year, compared to £329 in 2024.

Cherry Chan, partner at Deloitte, said: “Home insurers will have breathed a sigh of relief at the relatively mild weather so far this winter, leading to fewer claims compared to this time last year.”

2026 forecast

However, with subsidence claims expected to surge this year from a very dry summer, Chan warned ”there may still be a sting in the tail of 2025 to come”. 

Deloitte also forecasts that in 2026, consumers will see a notable drop in their premiums, which are set to decline 7% to £306, driven by a further decrease in claims and a competitive UK market.

In turn, the firm expects there to be losses across the market this year.

Chan said: “For insurers, claims inflation has remained persistent throughout 2025 and is expected to continue into 2026. However, with customers spending more time at home post-pandemic and spotting potential issues earlier, the number of overall claims is down, keeping premium increases off the table.

“The market remains competitive, however, and insurers need to both hold on to existing customers and attract new ones. As a result, premiums are expected to fall in 2026, also leading to a consequent fall in underwriting profitability. Winning firms will be those that continue to focus on delivering outstanding service to customers, while doubling down on operational efficiency.”