2026
9
UK Motor Insurance Market Report 2026
2026-03-04T16:01:28+00:00
REP0E365219_00A0_4897_B652_1900A0589762
2195
191738
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Report
en_GB
The UK motor insurance market has proven resilient in the face of volatile macroeconomic trends. Average premiums fell between Q1 2024 and Q3 2025, yet the sector still generated £16.6…
UK
Insurance
simple

UK Motor Insurance Market Report 2026

The UK motor insurance market has proven resilient in the face of volatile macroeconomic trends.

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  1. EXECUTIVE SUMMARY

    • What you need to know
    • Outlook for motor insurance
    • Opportunities
    • Demonstrate value to overcome concerns over price
    • Address urban and rural motorists differently
    • Informal channels will assume greater importance as insurers look more at non-price factors
  2. THE MARKET

    • Snapshot – market size and forecast
    • Consumers remain cautious about improvements to their financial wellbeing
    • UK car parc returns to growth following pandemic
    • Graph 1: registered cars in use, 2020-25
    • Reported claims to insurers fell between 2022 and 2024
    • Graph 2: number of claims notified (private cars), 2020-25
    • While average insurance premiums ease…
    • Graph 3: quarterly average motor insurance premium (private cars), 2022-25
    • …claim values have been rising recently
    • Graph 4: average claim paid (private cars), 2020-25
    • Lack of switching behaviour in insurance
    • Graph 5: Action take by motor insurance policy holder when car insurance last renewed, 2025
    • Market size and forecast
    • Market size and forecast for motor insurance
    • Graph 6: Market size and forecast of the UK motor insurance sector, 2019-30
    • Comprehensive cover dominates ownership
    • Graph 7: type of motor insurance held by annual policyholders, 2025
  3. THE CONSUMER

    • Motor insurance ownership
    • Car insurance is the most widely held insurance product
    • Interest of young adults in rolling monthly insurance hints at further innovation opportunities
    • Graph 8: rolling monthly car insurance that can be cancelled at any time, 2025
    • Appealing to young people through flexibility and support
    • Leverage the power of urban focused marketing
    • Graph 9: percentage of comprehensive and third party insurance policies, by location, 2025
    • Recent experience with motor insurance companies
    • Falling renewal premiums feeds through to consumers
    • Tackle the perception of rising premiums among older groups
    • Graph 10: change in premium at last renewal, by age, 2025
    • Car owners in rural and village locations are less likely to see a fall in their premium…
    • …as are those on lower incomes
    • Graph 11: change in premium at last renewal, by household income, 2025
    • Willingness of older customers to switch at renewal hints at need for specialist support
    • Graph 12: switched to a different insurer when when car insurance last renewed, by age, 2025
    • Three quarters of motorists stayed with their existing insurer at renewal, though 45% did so only after shopping around
    • Rewards for loyal customers can be an opportunity to offer targeted products
    • Lack of loyalty from rural policy holders is a call to action
    • Graph 13: action take by motor insurance policy holder when car insurance last renewed, by location, 2025
    • Most motorists stick to the same level of cover at renewal
    • Better communication about benefits of cover could lessen trading down by younger adults
    • Graph 14: changes to what is covered by your policy at last renewal, by age, 2025
    • Upselling opportunities exist for those that shop around at time of renewal…
    • …as well as families with children under 16
    • Sources used for information on motor insurance
    • Having an omni channel presence offers the chance to better communicate with wealthier adults
    • Graph 15: channels used when looking for motor insurance providers, 17-34 versus all adults, 2025
    • Social media is vital for courting under 35s
    • Low cost policies have a role on comparison websites
    • Family and friends have a role in promoting loyalty
    • Importance of non-price factors in switching company
    • Exploit interest in digital amongst young adults to promote wider brand benefits
    • Graph 16: non-price factors that would encourage switching car insurance to a different provider, 17-24 versus all adults, 2025
    • Reputation offers the opportunity to attract wealthy customers
    • Graph 17: provider with a better reputation in encouraging switching car insurance to a different provider, by household income, 2025
    • Sustainability matters to young families
    • Attitudes towards motor insurance
    • Excess insurance could be better marketed
    • Pay-per-mile policy development could be aligned with VED changes for EVs
    • Graph 18: agreement that car insurance should reflect how much I drive, by location, 2025
    • Address policy misunderstandings to encourage uptake
  4. INNOVATION AND MARKETING

    • Campaigns are trying to humanise a cost‑sensitive category…
    • …as emotions run high within the motor insurance sector
    • Service promise and continuity are centre stage for Aviva
    • Admiral looks to reposition telematics as a mainstream product
    • Developing the EV car insurance market
    • Digital immediacy to raise the profile of CX
  5. APPENDIX

    • Market definition
    • The market
    • Forecast methodology
    • Forecast methodology – fan chart
    • Market forecast and prediction intervals
    • The consumer
    • Consumer research questions
    • Consumer research methodology
    • Abbreviations
Download Report Summary

"As price stability returns to the market insurers are seeking to compete on non-price factors in order to differentiate and exploit new market opportunities."

Thomas Slide, Category Director

Thomas Slide, Category Director

UK Motor Insurance Industry – Trends and Insights

  • The UK motor insurance market has proven resilient in the face of volatile macroeconomic trends. Average premiums fell between Q1 2024 and Q3 2025, yet the sector still generated £16.6 billion in gross written premiums in 2025. This decline was driven largely by increased competitive activity and easing inflation, even as the car parc continued to grow.
  • Average claim values have increased by 23.8% since 2020, reflecting the higher costs associated with advanced vehicle technologies such as EVs and ADAS. The widening gap between stagnant premiums and climbing claims is squeezing underwriting margins, pushing insurers to shift away from price-focused competition towards differentiation based on service, reassurance and broader value-added offerings.
  • Looking ahead, the market’s biggest opportunity lies in harnessing telematics, usage-based insurance (UBI) and multi-year, value-led products to create personalised savings and deepen customer loyalty. However, the most significant threat on the horizon is a projected slowdown in car-parc growth post-2028, as changing urban mobility policies, the rise of shared transport solutions and VED reforms are set to curb private vehicle ownership and restrict potential growth in premium volumes.

This Report Looks at the Following Areas:

  • Recent performance of the motor insurance market and forecasts for its future development
  • The range of factors that have an influence in the development of the market
  • Marketing trends and recent innovations within the motor insurance sector and the movement away from competing purely on price
  • Consumers’ experience with the motor insurance market and their likely purchase behaviour at renewal
  • Sources used by consumers for information when it comes to choosing a motor insurance provider and the importance of non-price factors in switching from an existing provider
  • Attitudes of consumers towards motor insurance

Report Scope

This report examines the UK market for domestic motor insurance. Commercial vehicle insurance is excluded. Most domestic motor insurance policies relate to private car insurance, which is the focus of the consumer research (i.e. cover for cars that are used by individuals for private purposes). As such, the terms ‘motor insurance’ and ‘car insurance’ are used interchangeably throughout the Report.

Market size data is sourced from the ABI, using the following definitions:

  • Motor insurance covers damage to or loss of motor vehicles operating on land, as well as all liabilities arising from their use.
  • Domestic motor insurance refers to vehicles where the main purpose is to transport nine or fewer non-fare paying persons (where each vehicle is individually rated; or the person insured is not a corporate or partnership and the number of vehicles insured is three or less) or 10 or more non-fare paying persons (where the persons insured are not a corporate or partnership and each vehicle is individually rated).
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