Motor insurers struggle to make price rises stick as competition intensifies

Motor insurers are struggling to push through and maintain price increases despite concerns that current premiums may not be sufficient to support sustainable returns, market experts have said.

The challenge was highlighted by Sabre chief executive Geoff Carter, who told Insurance Times earlier this month that insurers were finding it difficult to establish a foothold on pricing.

“The market is struggling to get a foothold [on pricing]. Everyone’s trying to increase prices and anyone you talk to at any of the insurance conferences is talking about the need for price increases,” he said.

“But that’s not been happening consistently and the market is struggling to make the prices stick.”

Fiona Annandale, UK insurance partner at EY, said the motor market was now in “one of the more challenging phases of the insurance cycle”.

While premiums were beginning to rise slowly following a period of falling prices, she said insurers continued to face claims inflation from rising repair, labour and vehicle costs, alongside disruption to global supply chains.

Annandale said increasing prices was not a straightforward solution in a market where customers could easily shop around.

“Regulatory pricing reforms, affordability pressures and price comparison websites mean consumers are more able and willing to switch provider, even for relatively small savings,” she said.

A changing motor cycle

Tony Sault, partner at Oxbow Partners, said the firm broadly agreed with Carter’s assessment, although he argued that the issue reflected deeper structural changes in the market.

“While most insurers recognise that rates still need to increase to cover ongoing claims inflation, the market is finding it difficult to sustain broad-based price rise,” he said.

“Competition remains intense, capacity seems plentiful and we see the insurers using increasingly sophisticated pricing models allowing them to target growth selectively, making industry-wide increases harder to maintain.”

Recent market consolidation has reshaped competition, with fewer, larger insurers competing for profitable business through scale, technology and more efficient supply chains.

As a result, insurers are focusing on profitability through tighter cost controls, underwriting discipline and differentiation rather than broad premium increases.

Sault said this made it harder for insurers collectively to push through rate increases.

“Our view is that as inflation has eased, some insurers have shifted their focus back to growth, increasing competition in selected segments significantly ahead of competitors for prolonged periods,” Sault added.

He also warned that although claims inflation had moderated from peak levels and helped deliver a record year for motor profitability in 2025,  underlying cost pressures had not disappeared.

Oxbow expects the market loss ratio to increase from around 66% in 2025 to approximately 71% in 2026 as claims severity pressures re-emerge through repair, parts and labour costs.