Tom Lawrie-Fussey, associate vice president, product management, LexisNexis Risk Solutions, UK and Ireland.
After a very active period for the U.K. motor insurance market, the first half of 2025 brought a measure of calm before another potential storm. According to the latest LexisNexis® Insurance Demand Meter U.K. H1 2025, both shopping and switching eased from the record highs of 2024. Falling premiums cooled consumer churn, but with repair and theft costs climbing, the lull could be short-lived.
Shopping and Switching Slow as Premiums Dip
Following 2024’s frenetic market activity, 20,000 fewer consumers per day shopped for a motor insurance policy in H1 2025 compared with the same period in 2024. The number of policyholders switching providers also fell slightly to 22%, down from 25% in the final quarter of 2024.
This cooling reflects a broader softening in premium rates. The ABI reported that average motor premiums fell in Q3 2025, offering relief to drivers under pressure from rising living costs. But the respite may prove fleeting. The cost of vehicle repairs and theft claims continues to climb, and these pressures could quickly reverse the downward premium trend.
Market Power Shifts Beyond the Big Ten
The reduction and current stabilising of premiums also led to a significant change in dynamic for policy wins. From Q3 2023 through Q3 2024, the Top 10 insurers consistently won more business than they lost. But in H1 2025, the tables turned.
In H1 2025 alone, the rest of market saw a 30% increase in net customer gains vs. H1 2024 and, as such, customer wins across the sector became almost evenly matched between the largest and smallest providers. It seems that the fall in premiums levelled the playing field and allowed smaller, more agile providers to compete more effectively on price.
However, this balance may be temporary — likely favouring the larger players once again as higher premiums could return in 2026 driven by high claims costs.
Cancellations Reveal a Split Market
The LexisNexis® Insurance Demand Meter U.K H1 2025 also shows clear divergence in customer stability and fraud detection between large and smaller providers. Cancellations within three months of the policy starting were 29% higher for providers outside the Top 10, possibly due to the influx of new customers whose reliability may have been uncertain.
Interestingly, insurer-led cancellations among the Top 10 — where the insurer initiates termination of the policy — jumped over 23% in H1 2025, indicating faster intervention and more proactive risk management.
The Top 10 insurance providers also cancelled policies for fraud two and half times more often than smaller rivals, pointing to stronger, earlier fraud detection.
Car Values Slide as Drivers Hold Off Upgrades
Economic pressures continue to reshape the U.K. vehicle landscape. The average value of insured cars has dropped by almost £500 in two years, from £11,000 in late 2023 to around £10,500 in H1 2025. At the same time, the average vehicle age has edged closer to 11 years old as drivers delay replacing their cars due most likely due to cost-of-living concerns.
That said, new car ownership is rising marginally. Vehicles less than a year old now account for 3.1% of insured cars, up from 2.6% in 2023 — helped by lower interest rates and improved finance options.
Outlook: Calm Before Another Storm?
Falling premiums have reduced switching and given those insurance providers outside of the top ten a chance to grow. But with motor insurance prices expected to come under renewed pressure in 2026 due to rising claims costs, this balance may soon shift again.
The Motor Insurance Taskforce is already working collaboratively across industry and government to explore solutions that can help stabilise and ultimately reduce insurance related costs for motorists. Every part of the market is striving to deliver competitive premiums, and data-driven underwriting is central to that effort.
Being able to understand risk at a granular level—relating to both the vehicle and the driver—is now business critical. It is not just about the vehicle’s specification, but how it has been driven in terms of claims and also maintained by the driver, its real-world value, and the presence and performance of ADAS features. These insights enable insurers to price more accurately and fairly, supporting affordable access to essential cover.
The LexisNexis® Insurance Demand Meter U.K. Provides Valuable Context
However, effective motor pricing relies not only on granular risk data, but also on an understanding of how the wider market is behaving. Combining individual-level insight with market-wide intelligence allows insurers to make more informed decisions and avoid relying solely on internal performance indicators.
LexisNexis® Risk Solutions is uniquely positioned to provide a true market-wide view of the U.K. motor insurance landscape. Through our analysis, insurance providers gain visibility of overall trends across shopping, switching, pricing and customer behaviour — insight that would be impossible to achieve from internal data alone.
By highlighting what is happening across the entire market, the LexisNexis® Insurance Demand Meter U.K. can help insurance providers sense-check performance so that they can refine decision-making and respond more effectively to emerging trends in an increasingly complex and competitive environment.
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