Motor and home insurance markets stabilising as premium drops slow

April 2025 saw a 0.8% decrease in motor insurance premiums, the smallest monthly drop recorded over the past 12 months. 

That was according to the latest General Insurance Price Index from pricing strategy consultants Pearson Ham Group, which said the data suggested that the “most aggressive phase of price correction” may be over.

The index also showed that the median top-five quoted premium had fallen to £467, though price falls have varied across segments. Motorists aged 31-40 and 51-60 saw the biggest falls of 1%, while those both older and younger saw little change.

Meanwhile, motorists with cars valued between £10,000 and £20,000 saw falls of 1%, while lower priced vehicles saw a more modest fall of 0.2%.

Stephen Kennedy, director at Pearson Ham Group, said: “Motor insurance pricing continues to soften, but we are now seeing more fragmentation in how prices are adjusting across customer segments and vehicle types. The sharp falls of recent months are slowing and this may be the early signal of a market beginning to stabilise.

“As always, the direction of travel will be influenced by claims experience, repair cost inflation and competitive dynamics in the months ahead. Insurers will need to remain agile and closely tuned in to these diverging pricing signals.”

Home premiums

Home insurance premiums also fell in April, declining 0.4% to take the total year-on-year decrease to 4%.

The median top-five quoted premium reached £212, with flats seeing the largest monthly drop of 0.7%, while premiums for large homes remained steady.

Smaller houses – those with zero to one bedrooms – fell by 0.5% in April, which Pearson Ham Group said reinforced the pattern that “mid-sized homes are seeing more downward movement, while higher-value properties are now showing signs of pricing stabilisation”.