Motor insurance premiums in the UK are still declining, but the rate of decrease is losing momentum, according to the latest data from the Confused.com Car Insurance Price Index in association with WTW. Average comprehensive premiums fell 9% year-on-year, a £66 reduction, reaching £711. While this remains significantly below the £995 peak recorded in December 2023, the drop is smaller than the 13% to 18% annual reductions seen over the previous five quarters. The market has now seen nine consecutive quarters of falling premiums.
Recent monthly trends reveal a more uneven pattern. January recorded a 3.2% decrease, but premiums rose slightly in December (0.8%) and February (0.4%). Tim Rourke, UK Head of P&C Pricing, Product, Claims and Underwriting at WTW, noted that while large-scale reductions in 2025 have eased, global factors such as the Middle East conflict may drive inflation and supply chain disruptions, potentially increasing motor insurance costs. Any upward pressure, he added, could be partially mitigated by lower claim frequency if motorists reduce mileage due to higher fuel prices.
Regional differences remain pronounced. Northern Ireland saw premiums rise 14% year-on-year to £947, marking the second consecutive quarter of increases and making it the second most expensive region after Outer London. In contrast, Manchester and Merseyside recorded the largest annual drop at 14% (£132), while South Wales saw an 11% (£67) decline. The South West remains the most affordable region, with average premiums of £492.
Younger drivers experienced the steepest reductions, with 17-year-olds seeing premiums fall 23% (£517) and 18-year-olds down 14%. However, recent trends indicate that not all demographics are benefiting equally. Steve Dukes, CEO of Confused.com, warned that while average premiums for new policies are at a three-year low, some groups have seen prices rise over the past three months. He emphasized that insurers who respond quickly and competitively could attract customers amid a challenging cost-of-living environment.
Overall, the data points to continued easing of premiums across the UK, but with clear signs that the pace of reductions is becoming less consistent, signaling a more complex market landscape for both drivers and insurers.
