Younger drivers reap rewards of record insurance price cuts  

Motor insurance premiums drop sharply in 2024, while home insurance shows signs of stabilisation. 

Consumers purchasing insurance policies for their home or vehicle will likely be pleased this week. According to the latest General Insurance Price Index from Pearson Ham Group, which shows a stabilisation in home insurance pricing and a record reduction in motor insurance premiums in 2024. 

Prices fell consistently every month since April, with December marking a significant 16% year-on-year decline compared to the end of 2023.  

Young consumers drive away with the best deal 

Younger drivers benefitted the most, experiencing reductions of almost 17% year-on-year. Drivers aged between 50 and 60 saw decreases of 16%, while those over 60 recorded an average drop of below 14%. The smallest reductions were noted among drivers over 70, with premiums falling by 13.4%.  

However, consumers likely won’t feel the effects, as many are still feeling the pinch from dramatic car insurance increases since the Covid-19 pandemic. Despite the sharp declines, motor insurance prices remain 21.4% higher than at the start of 2020, although this figure has improved from a peak of 46% higher in late 2023. 

Why have car insurance premiums dropped? 

 The reductions have been driven by competitive strategies among insurers, with some opting for aggressive price cuts in the latter half of the year. 

Stephen Kennedy, director at Pearson Ham Group, said: “The year 2024 marks a turning point in the motor insurance market. While prices remain over 21% higher than at the start of 2020, we anticipate further declines in 2025 as competitive pressures drive additional reductions.”  

Stabilisation in home insurance pricing 

Home insurance premiums also experienced changes in the tail-end of 2024, with prices dropping by 1.7%. The most substantial reduction occurred in December, which saw a 1.3% decline, signalling a shift in market dynamics. 

However, premiums remain nearly 12% higher than a year ago and have risen by 56% over the past two years, driven by challenging claims costs and frequency.  

Analysts suggest the stabilisation may indicate increased confidence among insurers to pursue growth, moving away from steep price hikes. 

Frances Luery, product manager at Pearson Ham Group, commented, “The decline in home insurance prices … indicates a welcome shift in the market after prolonged periods of sharp inflation.  

“While premiums remain significantly higher than two years ago, this recent stabilisation is a sign of things to come this year.” 

As 2025 begins, all eyes are on insurers to see if they can deliver more stable pricing for policyholders. 

Image: © Capuski via Canva 

Josie Geistfeld Josie is an editor for Claims Media. She welcomes feedback, comments, and opinion at josie.geistfeld@barkerbrooks.co.uk