Motor insurance premiums have continued to fall into 2025, with the latest data from Pearson Ham Group’s General Insurance Price Index revealing a -3.6% decrease in the average top-5 premiums in Q1. However, while the downward trend remains in place, the pace of reduction is clearly easing.
Premiums dropped by -2.4% in January, but the decreases tapered off to -0.9% in February and -0.4% in March. By March 2025, the year-on-year reduction stood at -17.7% compared to the end of April 2024.
This continued but decelerating decline has now been observed for 12 consecutive months.
Pearson Ham’s analysis shows drivers under 26 have seen the most substantial year-on-year premium cuts – almost -17%. The over-70s, while also seeing a drop, fared less well with premiums falling by -13.4%.
The regional split also highlights some surprising contrasts. The North-East has seen the sharpest drop in premiums, down by -19.5%, while Northern Ireland lags behind with a comparatively modest -13.4% reduction.
Stephen Kennedy, director at Pearson Ham Group, commented,“On the surface, it’s good news for consumers – premiums are continuing to fall. But the devil is in the detail. The rate of decline is clearly losing momentum, and we’re seeing stark differences across age groups and regions. That suggests market dynamics are shifting, and the blanket reductions of the past year may soon give way to a more complex pricing landscape.”
Home insurance premiums continued to fall in the first quarter of 2025, with the average top-5 prices for combined buildings and contents cover down by -3.3%. While this drop is broadly in line with motor insurance trends, the decline in home premiums has been more evenly paced.
Premiums decreased by -0.9% in January, followed by -1.3% in February and -1.2% in March, according to the latest General Insurance Price Index from Pearson Ham Group.
Over the 12 months to March 2025, competitive premiums for combined home cover have declined by -1.7%, confirming a year-on-year reduction in pricing. But this seemingly positive movement masks a more complex reality.
Despite the recent downward trend, premiums remain 38.3% higher than they were two years ago. Much of this is a result of the significant premium inflation experienced throughout 2023 and most of 2024.
Frances Luery, product manager at Pearson Ham Group, commented, “Premiums are falling but the context is key. While prices are now below where they were a year ago, they’re still nearly 40% higher than in 2023. That gap reflects the intense inflationary pressure the home insurance market experienced over the last two years. The data shows some stability is returning, but we’re not yet back to where we started.”
Image provided by ©Xesai in Canva
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