Articles - Enriched vehicle data central to Motor Insurance Pricing

 

This suggests this more stable period may be under pressure. Our report shows how the U.K. car parc is changing. The average vehicle is now over 10 years old, while new manufacturers are entering the market at pace, particularly Chinese electric vehicle brands. Vehicle technology, including Advanced Driver Assistance Systems (ADAS), continue to evolve.  At the same time, claims costs remain under considerable pressure[iii].

 

For actuaries and pricing teams, this means traditional assumptions are being tested in new ways. Understanding risk is no longer just about broad vehicle categories. It increasingly depends on individual vehicle characteristics supported by high-quality data.

 

The LexisNexis Insurance Demand Meter U.K. for H2 2025 found that approximately 17,000 fewer consumers per day shopped for motor insurance during 2025 compared with the previous year. In the fourth quarter of 2025, only 21% of consumers who shopped for cover changed insurance provider, the lowest switching level recorded since early 2023.

 

Motor insurance shopping has always been cyclical. When insurance renewal premiums remain relatively stable, as they did for much of 2025, consumers who do shop around for motor insurance may find there is little to gain from switching. In those circumstances, many choose to stay put. 

 

However, motor insurance providers continue to face elevated repair costs, increasingly complex vehicle technology and ongoing supply chain challenges. Even relatively minor collisions can require recalibration of sensors, replacement of specialist components or manufacturer-approved repair techniques.

 

Against this backdrop, insurance providers are likely to be assessing whether current pricing remains sustainable. If premiums do start to rise, as Confused.com has reported[iv], shopping and switching activity may increase again.

 

A key finding from the latest LexisNexis Insurance Demand Meter U.K. is that the average insured vehicle value fell by almost £1,000 between the second half of 2023 and the second half of 2025. Over the same period, the average age of insured vehicles increased to approximately ten years and five months.

 

The reasons are understandable. Many motorists have delayed replacing vehicles[v] because of affordability concerns, higher borrowing costs and the ongoing cost-of-living crisis. There is likely to be an inflection point, though. As vehicles age, servicing costs tend to increase and MOT failures become more likely. Eventually, the cost of keeping an older vehicle on the road can outweigh its market value.

 

Older cars are also far from uniform. Many contain different generations of ADAS. Some have received software updates throughout their life while others have not. Maintenance histories differ considerably, and repair methods can vary depending on age, manufacturer and previous repairs.

 

Electric vehicles can have fewer mechanical servicing requirements than traditional internal combustion engine vehicles. However, battery condition, electronic systems, specialist repair capability and component availability can all affect insurance claims costs and residual values and ultimately, pricing assumptions.

 

This is where more granular vehicle intelligence becomes essential. Understanding a vehicle’s precise specification, equipment, powertrain and current market value can help pricing models better reflect actual exposure, rather than relying on broad assumptions.

 

Perhaps the most striking trend emerging from the latest LexisNexis Insurance Demand Meter U.K. is the continued growth of Chinese car brands. By the end of 2025, Chinese vehicle manufacturers represented 1.2% of personal motor insurance policies, compared with 0.6% in 2022. While this remains a relatively small share of the overall motor insurance market, the growth has been consistent and is expected to continue as more models reach U.K. roads. This shift is taking place alongside wider growth in electric vehicle registrations, with the Society of Motor Manufacturers and Traders (SMMT)[vi] reporting a 35% year on year increase in registrations of new battery electric vehicles.

 

As Chinese car brands become more established, some of the insurance pricing uncertainty seen today may begin to ease[vii]. The granular vehicle data available to motor insurance providers should, in time, be complemented by a fuller understanding of claims experience, better availability of green parts and stronger repair networks.

 

As the composition of the U.K. car parc continues to change, the motor insurance providers best equipped to respond will be those that combine actuarial expertise with rich, real time vehicle intelligence. That combination can support more accurate risk assessment, greater pricing confidence and better outcomes for customers, whether they choose to switch to an EV or stay with a vehicle they already know.