In personal lines, the latest data from Consumer Intelligence reveals a mixed picture.
Motor insurance prices had been on the rise pretty much every month since the third quarter of 2015, but things took a turn towards the end of 2023 and premiums have fallen by a not inconsiderable amount since then.
Indeed, between December 2023 and December 2024, premiums fell by an average of almost 8.5%, while older drivers – those aged over 50 – saw premiums fall by more than 13% over the same period. The only age group to buck that trend was drivers aged under 25, with premiums remaining relatively steady over the last 12 months.
Despite this recent drop, prices are still much higher than they were 10 years ago, with motor premiums more than doubling over that period.
In home insurance, the Consumer Intelligence data reveals a slightly different picture.
While the price of home insurance has not risen as dramatically over the last decade when compared to motor insurance, the market has not yet begun to soften – although the rate of increase has been slowing.
Home insurance premiums rose by an average of a little over 10% over the 12 months to the end of December 2024. But there are signs in the numbers that the tide may beginning to turn after a slight fall in premiums over the final month of last year, and many commentators expect prices in the home insurance market to begin to come down over the coming months.
In commercial lines the picture is much clearer.
Data from the Marsh Global Insurance Market Index reveals premiums have been falling across all four of the main categories of business tracked by the broker in the UK – composite business, property, casualty, and finpro.
Finpro lines have seen the biggest drop in premiums, with the average cost of cover falling by 8% over the course of the final quarter of 2024. This compares to composite business premiums falling by 4%, while property and casualty premiums fell by an average of 4% and 1% respectively.
This represents the first quarter since Q2 2019 that premiums have reduced in the property market, with the softening of rates lagging behind other markets where they have fallen for at least three consecutive quarters.
The finpro market was the first to turn, with rates in that sector having now fallen in each of the last nine quarters.
So the insurance market certainly looks to be entering into a period of softening rates, and after a sustained period of premium inflation this will be welcome news to insureds.
But with brokers having become used to riding the wave of increasing premiums to fuel organic growth, and insurers in many lines still struggling to turn an underwriting profit, only time will tell whether the softer market is here for the longer-term.