The picture has become more nuanced as the rate of decrease in motor moderated to an extent, while home experienced its steepest monthly reduction in a year.
Motor insurance prices dropped by -0.9% in July taking the year-on-year reduction to -16.3%. Year-to-date, premiums are now -6.0% lower than January 2025. The median top-five motor premium in July was £438, down from £455 in June.
Stephen Kennedy, Director at Pearson Ham Group, said: “Premiums are still edging down, but the rate of decline in motor is slightly easing. That usually points to a market feeling its way towards stability. The next few months will be shaped by claims costs through the autumn, repair and parts dynamics, and how assertively insurers choose to compete for new business in the second half of the year.”
Home insurance continued to move lower at pace. Average top-five combined buildings and contents premiums fell by -2.0% in July versus June, the fastest monthly drop in twelve months. Prices are now -9.7% lower than a year ago and -8.1% below January 2025 levels. The median top-five home premium in July was £200.
Frances Luery, Product Manager at Pearson Ham Group, commented: “Home pricing drops picked up speed in July, delivering the biggest monthly reduction we’ve seen this year. Two consecutive quarters of declines have taken meaningful heat out of premiums, but we expect greater segmentation ahead. Outcomes will vary by property type, location and claims experience as the market searches for its new equilibrium.”
Looking ahead, Pearson Ham expects both markets to become more segmented as insurers balance competitiveness with loss-cost realities. In motor, the gentler movements suggest stabilisation is approaching, while in home the sharper July adjustment may prompt more targeted pricing by risk type, region and property characteristics through the remainder of 2025.
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