Motor and home premiums drop again in third quarter of 2025

Motor premiums fell once again in Q3 2025, though the rate of decline has slowed since the first half of the year, according to the latest General Insurance Price Index from pricing consultancy Pearson Ham Group.

The average price of the top five quoted motor premiums fell by 2.9% across Q3, noticeably less than the 4% fall seen in the previous quarter. Overall, premiums have fallen by 15% year-on-year.

Stephen Kennedy, director at Pearson Ham Group, explained that while motor insurance pricing had continued to “edge down”, the “rhythm of reductions has steadied”, suggesting the market had entered a “more controlled phase of competition – one where insurers are refining their positioning rather than driving headline price cuts”.

He continued: “This suggests the market is nearing a natural floor and from here we expect to see greater divergence in pricing by customer type, risk profile and distribution channel as insurers seek sustainable market share rather than short-term volume.”

Home insurance

Home insurance, meanwhile, underwent a 4.9% drop over the most recent quarter, slightly more than the 3.8% fall seen in the previous quarter.

Premiums for home policies are down a total of 13% year-on-year, after steeper falls were seen in the first half of the year.

Frances Luery, product manager at Pearson Ham Group, explained: “We’re seeing a pattern of sustained competition across the home insurance market, with premiums now materially lower than last year.

“However, the data still reflects a market that’s recalibrating after a prolonged period of claims and cost inflation. The key question now is how much further prices can realistically fall before we see renewed upward pressure from claims trends and weather-related losses heading into winter.”