The latest General Insurance Price Index from Pearson Ham Group shows that average top-five premiums for motor and home insurance fell again in July, continuing the decline seen throughout the first half of the year.
Motor insurance prices fell 0.9% in July, bringing the year-on-year reduction to 16.3%. Premiums are now 6.0% lower than in January 2025. The median top-five motor premium stood at £438, down from £455 in June.
Stephen Kennedy (pictured above, left), director at Pearson Ham Group, said premiums are still edging lower, though the pace of decline in motor is slowing.
“That usually points to a market feeling its way towards stability. The next few months will be shaped by claims costs through the autumn, repair and parts dynamics, and how assertively insurers choose to compete for new business in the second half of the year,” Kennedy said.
Pearson Ham’s broader quarterly data shows motor premiums declined 4% in Q2 2025, following a 3.6% drop in Q1. This slowing pace of reduction suggests pricing is beginning to level out after months of steep falls.
The regional picture remains uneven: the North East and North West recorded the largest year-on-year drops in motor premiums at 18.5% and 18.7% respectively, while changes in other areas were less pronounced. Variations were also seen across vehicle values, with cars worth £10,000–£20,000 seeing bigger price adjustments in recent months than lower-value vehicles.
Home insurance saw its sharpest monthly fall in a year. Average top-five combined buildings and contents premiums dropped 2.0% in July compared with June. Prices were 9.7% lower than in July 2024 and 8.1% below January 2025 levels. The median top-five home premium was £200.
On a quarterly basis, home premiums fell 3.8% in Q2, slightly faster than the 3.3% drop recorded in Q1. While these declines have eased pressures from last year’s highs, average home premiums are still more than 23% higher than they were in mid-2023, reflecting the residual impact of inflation and elevated claims costs from previous years.
Frances Luery (pictured above, right), product manager at Pearson Ham Group, said July’s decline marked the largest monthly reduction this year for home cover.
“Two consecutive quarters of declines have taken meaningful heat out of premiums, but we expect greater segmentation ahead. Outcomes will vary by property type, location and claims experience as the market searches for its new equilibrium,” Luery said.
Pearson Ham expects both motor and home markets to move towards greater segmentation in the coming months, as insurers weigh competitive positioning against the realities of claims and loss costs.
In motor, slower monthly changes could indicate stabilisation, while the sharper fall in home premiums may lead to more targeted adjustments by risk type, region, and property characteristics over the remainder of 2025.
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