The latest analysis of the Financial Conduct Authority's (FCA) value measures data by market intelligence firm Insurance DataLab has revealed a persistent divide in the value delivered by different insurance products in the UK market.
While headline results for core products such as motor and home insurance remain broadly stable, significant variation persists across the wider market, particularly among add-on products.
Motor insurance continues to perform strongly, with 99% of claims accepted and payouts averaging 54% of premiums in 2024. Home insurance results were weaker, with payouts averaging 46% of premiums and claims acceptance falling to 71%, while 11% of customers lodged a complaint.
Personal accident add-ons recorded an average payout ratio of just 23%, while before-the-event home legal expenses insurance saw only half of claims accepted and one in 10 claims resulting in a complaint.
GAP insurance, previously one of the weakest-performing products, recorded a payout ratio of more than 100% of premiums following regulatory intervention, according to the data. However, this increase reflects lower premium volumes rather than an improvement in product performance.
Some add-ons continued to deliver strong value. Motor legal protection performed particularly well, with 96% of claims accepted and minimal complaints, while healthcare cash plans paid out 69% of premiums with an average of more than two claims per policy per year.
Insurance DataLab co-founder Dan King said the stability in the FCA’s data conceals deeper disparities in customer outcomes. While motor insurance maintains consistent performance, too many add-on products continue to deliver limited value or show low claims acceptance. He noted that insurers offering personal accident and legal expenses add-ons should remain alert, as these may attract further regulatory scrutiny.
The findings come amid shifting conditions in the UK motor and home insurance markets. Motor insurance premiums have dropped significantly over the past year, with the average comprehensive car insurance premium falling to around £735 in September 2025, down 16% from a year earlier and 26% below the December 2023 peak of £995. This decline suggests the market is stabilising after a period of sharp premium hikes, although claims payouts remain elevated, reaching £11.7 billion in 2024 due to theft, repair costs and inflationary pressures.
The home insurance market, meanwhile, is also seeing some relief, with average premiums falling 2% month-on-month in July 2025 and 9.7% year-on-year. However, average premiums remain more than 23% higher than mid-2023 levels, underscoring continued inflationary pressure and rising claims costs.
Against this backdrop, King said insurers must focus on ensuring their products deliver genuine value for money. In an era of Consumer Duty and heightened regulatory oversight, he added, those that can demonstrate good outcomes for policyholders will not only meet compliance standards but also strengthen customer trust and retention across the market.
